Module: General Practice
Q128: Identify the INCORRECT statement regarding the Central Registry of Securitisation Asset Reconstruction and Security Interest of India, known as CERSAI.
✅ Correct Answer: B
Correction: Registration of security interest with CERSAI is mandatory, not optional.
Impact of Non-Registration: Section 26D of the SARFAESI Act specifically provides that no secured creditor shall be entitled to exercise the rights of enforcement of securities under Chapter 3 unless the security interest created in its favor has been registered with the Central Registry.
Purpose: CERSAI was established to create a public database of encumbrances to prevent the practice of taking multiple loans from different banks using the same property.
Impact of Non-Registration: Section 26D of the SARFAESI Act specifically provides that no secured creditor shall be entitled to exercise the rights of enforcement of securities under Chapter 3 unless the security interest created in its favor has been registered with the Central Registry.
Purpose: CERSAI was established to create a public database of encumbrances to prevent the practice of taking multiple loans from different banks using the same property.