According to Section 20 in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) of 2002, the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) was set up to enable transparency in asset registration. As per this act, CERSAI, a company owned by the central government, is deemed responsible for maintaining and operating the central registry on behalf of the central government of India.
CERSAI was undertaken and implemented by the government to keep illegal and fraudulent activities in check. When properties are used as collateral by an individual or a company to raise loans or debt, the CERSAI registry provides access to all records related to the mortgaged properties.
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Impact of CERSAI Charges on Home Loans
The government started levying CERSAI charges on home loans to protect the interest of the loan provider. It enables the lenders to check ongoing or prior security interest created by another lender on the same collateral or property against which the loan was sanctioned.
Within 30 days of creating a new security interest, the loan provider has to register the transaction on the official website/portal with the required documentation. Prescribed by CERSAI, the borrower is levied with charges of Rs. 50 if the loan amount is within Rs. 5 lakhs and Rs. 100 if it exceeds Rs. 5 lakhs.
Relevance of CERSAI Charges in Securing your Home Loan
- All types of loans and mortgages within India are registered under CERSAI.
- Lenders can gather information through CERSAI on the collateral property to ensure that the borrower does not take multiple loans on the same collateral from different financial institutions or lenders.
- CERSAI provides a complete database and up-to-date guidelines used by borrowers and lenders to examine the authenticity of the property as collateral for loans.
- It is immensely beneficial for buyers interested in purchasing the property and keeping it as collateral for the home loan. They can check for pending mortgages or any liabilities against the property.
- If a property has been attached as collateral to another institution, the loan provider estimates whether the property’s value is sufficient enough to extend another loan to the applicant.
- The charges paid toward CERSAI are usually borne by the applicants seeking the loan. Even if the lender denies the loan application, the loan applicant must pay the charges of CERSAI.
The points given above highlight the importance of CERSAI charges in securing your home loan.
Amazing Facts about CERSAI Charges on Home Loans
- CERSAI is entrusted with operating and maintaining KYC (Know Your Customer) registry and caters to major Indian regulators like the Securities & Exchange Board of India (SEBI), the Reserve Bank of India (RBI), the Pension Fund Regulatory and Development Authority (PFRDA) and the Insurance Regulatory & Development Authority of India (IRDAI).
- Any financial institution can register numerous transactions associated with asset reconstruction and securitisation under CERSAI.
- Over the years, CERSAI has further endowed with registration and maintenance of all types of loans and mortgages, all security interest generated on intangible and immovable assets.
- The online portal of the CERSAI registry, with some charges, can be ingressed by any individual or financial institution. The charges can either be prepaid by the loan provider or mandatorily paid by the applicant.
- The Credit Information Bureau of India Limited (CIBIL) and CERSAI now are jointly collaborating to make the lending process more transparent with smooth efficiency and the least possibility of fraud and scams.
Housing Loan Interest
Home loans are long-term loans or secured loans, and an applicant needs to calculate the overall liability, interest payment, tenure and instalment amount towards the loan. There are various ways an individual can gather information regarding home loans by personally visiting financial institutions or by using the online home loan EMI calculators by financial institutions. The interest rate is one of the major factors considered while applying for a home loan since it determines the EMI and total payable amount later.
The interest rate on home loans varies based on one financial institution to another. The interest rate differs for applicants based on numerous parameters and documentation. Financial institutions even offer interest rates based on private or government employment, businessman, self-employed individuals, civil servants, army veterans, HNIs and NRIs.
Here is the interest rate of the financial institution offering housing loans for salaried and self-employed applicants:
| Name of the Institution | Salaried Applicant (% per annum) | Self-Employed Applicant (% per annum) |
| Grihshakti | 9.50% onwards | 10.50% onwards |
Conclusion
Every financial institution in India has to update the details about the sanctioned loan to the CERSAI database within 30 days of sanctioning the loan amount to the borrower. With the help of all financial institutions, the CERSAI database is updated to prevent fraud and dual registration with complete transparency for institutions and borrowers across the country.
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