Closing in on property fraud

On the lines of a information network to track a citizens' credit history, the registry of land records has started gathering traction. The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) tracks the history of a plot of land or flat to give buyers a clear information what they will get into.

This is critical as retail buyers in this market often face an information asymmetry. The Cersai data bank tells the buyer if the property is already mortgaged or worse, has multiple title deeds.

With a huge jump in the market for mortgages ( 18 per cent as per National Housing Bank data for the year 2011-12) the demand for such a data base is intense. It is to cater to this demand that the idea of a central registry of all mortgaged properties with banks developed. The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) was set up and became operational in March 2011.

The principal it works upon is simple — just like a credit information company such as CIBIL (Credit Information Bureau (India) Ltd) compiles the financial history and credit worthiness of an individual for lenders, CERSAI works to give a comprehensive financial information on any property on which loans have been availed or those that are being offered as collateral. For prospective buyers, it also gives data on any property they plan to buy.

Along with member banks and financial institutions, even potential buyers of real estate can log on and request data on the legal status and credit worthiness of a property by payment of a nominal fee of Rs 50 per transaction. The travails of entering into such a fraudulent transaction and the consequent litigation and hassles was also encaptured in the popular Hindi film 'Khosla ka Ghosla'.

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