CERSAI Rules make mandatory registration of charges of every kind

CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest) registration is mandatory for all types of security interests created on assets, including mortgages, securitization, and asset reconstruction. This includes loans secured by properties or other assets. The registration must be done by the lender within 30 days of creating the security interest.Section 17 to…

Lender’s right when the borrower owns and possesses the hypothecated assets

The lender’s right to the term “Hypothecation of assets” was not defined anywhere in the statute till the SARFAESI ordinance 2002. Some courts have even compared   ‘hypothecation to a mortgage of movables’. Hypothecation occurs when an asset is offered by the borrower to the lender as prime or collateral to secure a loan/credit limit without…

Charge creation: Assignment, Lien, Set-off, Hypothecation, Pledge, Mortgage,Actionable claim, and Trust receipt

The article explains various types of charges created by banks to establish their rights over the specified security when the borrower defaults. The charge creation means establishing the lender’s right to recover from the specified assets of the borrower, in case the recovery is difficult in the normal course. The mode of bank charge on…

SARFAESI ACT 2002:Applicability,Objectives and process of NPA recovery

The SARFAESI ACT  is the acronym of Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002. The Act has been amended by the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act 2004. The SARFAESI Act provides for Enforcement of Security Interest for the realization of the dues without the intervention of Courts or Tribunals which is treated as one…

Securitisation of stressed assets: RBI releases paper on regulatory purview

As per the current guidelines, Securitisation is allowed only in the case of standard assets while lenders have to largely rely on Asset Reconstruction Companies (ARCs) for bad assets. Based on market feedback, stakeholder consultations, and the recommendations of the Task Force on Development of Secondary Market for Corporate Loans, RBI decided to introduce a…