CAIIB BRBL Module C Unit 7 : Central Registry

02/11/2023

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CAIIB Paper 4 BRBL Module C Unit 7 : Central Registry (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 4 (BANKING REGULATIONS AND BUSINESS LAWS) includes an important topic called “Central Registry”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Paper 4 (BRBL) Module C (IMPORTANT ACTS/LAWS & LEGAL ASPECTS OF BANKING OPERATIONS – PART B) Unit 7 : Central Registry, Aspirants must go through this article to better understand the topic, Central Registry and practice using our Online Mock Test Series to strengthen their knowledge of Central Registry. Unit 7 : Central Registry

Central Registry

Under the SARFEASI Act, there is a provision for the establishment of a Central Registry under Section 20 of the Act.
The Central Government may, by notification, set up or cause to be set up from such date as it may specify in such notification, a registry to be known as the Central Registry with its own seal for the purposes of registration of transaction of securitization and reconstruction of financial assets and creation of security interest under this Act.
The head office of the Central Registry shall be at such place as the Central Government may specify.
The Central Government may, by notification, define the territorial limits within which an office of the Central Registry may exercise its functions.

The objective of setting up of Central Registry is to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property. The Registry has become operational on March 31, 2011.

Transactions/charges required to be mandatorily registered by banks and financial institutions are:

All particulars of creation, modification or satisfaction of security interest in respect of equitable mortgages created
All particulars of creation, modification or satisfaction of security interest other than mortgage by deposit of title deed.
All particulars of creation, modification or satisfaction of security interest in hypothecation of Plant & Machinery, stock, book debts whether existing or future
All particulars creation, modification or satisfaction of security interest in intangible assets being know how, copy rights, trade marks, etc. or similar nature.

The charges will be effective from the date of registration of charge with CERSAI.
Creditors other than secured creditors are not eligible to exercise right of enforcement of securities under this Act.
Any person having order of attachment against the borrower shall file such order with Central registry. Such registration will be deemed to be public notice from the date of filing with the Central Registry.
No secured creditor shall be allowed to exercise right of enforcement of securities unless the security interest created has been registered with the Central Registry.
Secured creditor and creditors holding order of attachment shall have priority over all subsequent security interest created upon such property and any transfer by way of sale, lease or assignment or license of such property or attachment order subsequent to such registration.

Register Of Securitisation, Reconstruction And Security Interest Transactions

A record shall be maintained at the central registrar at the head office of the central registrar in which transactions relating to:

Securitization of financial assets
Reconstruction of financial assets,
Creation of security interests shall be maintained.

In terms of Section 22 of the SARFEASI Act 2002 The record of central registrar can be kept fully or partly on computer, floppies, diskettes, or any other electronic form. Any entry made with the central registrar shall be a reference to any such transaction. The central registrar shall have the control and management of the central register.

Filing Of Transactions Of Securitisation, Reconstruction And Creation Of Security Interest

As per Section 23 of the SARFEASI Act 2002 (1)] the particulars of every transaction of securitization, asset reconstruction or creation of security interest shall be filed, with the Central Registrar in the manner and on payment of such fee as may be prescribed.
The Central Government may, by notification, require the registration of transaction relating to different types of security interest created on different kinds of property with the Central Registry.
The Central Government may, by rules, prescribe forms for registration for different types of security interest under this section and fee to be charged for such registration.

Satisfaction Of Security Interest

The asset reconstruction company or the secured creditors, shall give intimation to the Central Registrar of the payment or satisfaction in full, of any security interest relating to the asset reconstruction company or the secured creditors and requiring registration within hirty days from the date of such payment or satisfaction.
On receipt of intimation under sub-section (1), the Central Registrar shall order that a memorandum of satisfaction shall be entered in the Central Register.
If the concerned borrower gives an intimation to the Central Registrar for not recording the payment or satisfaction. The Central Registrar shall on receipt of such intimation, cause a notice to be sent to the asset reconstruction company or the secured creditors calling upon it to show cause within a time not exceeding fourteen days specified in such notice, as to why payment or satisfaction should not be recorded as intimated to the Central Registrar
If no cause is shown, the Central Registrar shall order that a memorandum of satisfaction shall be entered in the Central Register.
If cause is shown, the Central Registrar shall record a note to that effect in the Central Register, and shall inform the borrower that he has done so.
The particulars of securitization or reconstruction or security interest entered in the central register are open for inspection by any person during office hours on payment of fees as may be prescribed. Same is applicable if the data is kept in the electronic form at the office of the central registrar. (Section 26).

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CAIIB 4 Module C Unit 7-Central Registry ( Ambitious_Baba )