CERSAI in case of vehicle loans

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CERSAI registration is applicable on vehicle loans sanctioned by banks. Lenders must register hypothecation of the vehicle with CERSAI to record security interest and prevent fraud. Applicable charges are part of compliance and administrative costs for maintaining the centralized asset registry.

RAHUL PARIHAR

RAHUL PARIHAR (Querist)
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06 July 2017 Does CERSAI charges are applicable in case of a vehicle loans sanctioned by a bank?? (As per the recent changes in CERSAI law)

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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19 July 2024 Yes, CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India) charges are applicable in case of vehicle loans sanctioned by a bank, as per the recent changes in CERSAI law.

CERSAI was established to maintain a registry of all types of transactions involving security interests in assets, including loans. Banks and financial institutions are required to register their security interests (like mortgages, pledges, hypothecation of vehicles, etc.) with CERSAI. This registry helps in creating a centralized database to prevent frauds related to multiple financing against the same asset and to streamline the process of due diligence for lenders.

When a bank sanctions a vehicle loan, it typically registers its security interest in the vehicle with CERSAI. The charges applicable under CERSAI include registration charges for creating a record of the security interest against the vehicle. These charges are a part of the administrative costs associated with maintaining the CERSAI registry.

Therefore, banks providing vehicle loans are required to comply with the CERSAI registration process and pay the applicable charges as per the guidelines of CERSAI. These charges ensure that the security interests of the lenders are recorded and accessible for verification by other lenders and stakeholders.

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