Module: | Enforcement and Appeals
Q6: To prevent fraud involving multiple loans against the same asset, the SARFAESI Act mandated the creation of a central registry. Which of the following statements regarding this registry are correct?
1. The registry is known as "CERSAI" (Central Registry of Securitisation Asset Reconstruction and Security Interest of India).
2. Its primary purpose is to maintain a central record of security interests aimed at preventing borrowers from mortgaging the same asset to multiple lenders.
2. Its primary purpose is to maintain a central record of security interests aimed at preventing borrowers from mortgaging the same asset to multiple lenders.
✅ Correct Answer: C
CERSAI was established under the SARFAESI Act to function as a central registry.
Its objective is to record details of security interests created on assets, thereby allowing potential lenders to verify if an asset is free from encumbrances and preventing multiple financing on the same collateral.
Its objective is to record details of security interests created on assets, thereby allowing potential lenders to verify if an asset is free from encumbrances and preventing multiple financing on the same collateral.