Registration of Securitisation and
Reconstruction Transactions:
Banks and financial institutions undertake
securitisation of healthy assets, but such securitisation may not be under the
provisions of the SARFAESI Act. The assignment of loan receivables with or
without the benefit of underlying securities is done in favour of a Special
Purpose Vehicle (SPV), using the provisions of the Indian Trust Act, 1882. Such
assignment of loan receivables may not be in favour of any SC or RC registered
under the provisions of section 3 of the SARFAESI Act. Such securitisation transactions
are therefore not required to be registered with CERSAI. If any SC or RC
registered under the SARFAESI Act is acquiring loan receivables for
securitisation or asset reconstruction, such transactions are required to be
registered in Form-III prescribed under the Central Registry Rules. It needs to
be noted that registration of transactions of securitisation or reconstruction
has no relevance with creation of mortgage by deposit of title deeds. There
could be cases where securitisation or reconstruction is undertaken in respect
of loan receivables which are unsecured or secured by security interest other
than mortgage by deposit of title deeds. All such transactions of
securitisation or reconstruction are required to be registered with CERSAI. In
many cases, such securitisation or reconstruction transactions would relate to
a bundle of loans consisting of many loan accounts acquired from any bank or
financial institution. In such cases, satisfaction of the securitisation /
reconstruction transaction will have to be filed with CERSAI after all the
accounts contained in such bundle of loans are satisfied or otherwise closed.
It is not necessary to file any Form for Satisfaction, if only part of such
loan portfolio acquired by SC/RC is settled and recovered.
It is not necessary that the loans acquired by SC/RC for the purpose of securitisation or reconstruction or secured by mortgage by deposit of title deeds. However, any SC/RC registered with Reserve Bank of India is also a secured creditor for the purposes of SARFAESI Act. Hence, if in the process of reconstruction of any loans acquired by SC/RC, a mortgage is created in favour of SC/RC to secure the reconstructed loans or any further finance granted to the borrower, such mortgage created in favour of SC/RC will have to be registered by filing Form-I with the CERSAI.
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