Section 38C of The National Bank for Agriculture and Rural Development Act, 1981
1[38C.Exemption from compulsory registration.--Notwithstanding anything contained in subsection (1) of section 17 of the Registration Act, 1908 (16 of 1908)--
- (a)any instrument in the form of debt obligations or trust certificate of beneficial interest or any other instrument, by whatsoever name called, issued by the National Bank or the trust created by it to securitise the loans granted by it and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property; or
- (b)any transfer of such instruments referred to in clause (a), shall not require compulsory registration.]
Summary
- When the National Bank issues instruments like trust certificates to securitise loans, these documents do not need to be officially registered.
- This exemption from registration only works if the instruments do not create or change any legal rights related to immovable property (like land or buildings).
- If someone wants to transfer one of these exempt instruments to another person, the transfer itself is also exempt from compulsory registration.
Practical examples
FAQ
1. Do all documents from the National Bank skip registration?
No, only specific instruments issued to securitise loans, provided they do not affect rights to immovable property.
2. What happens if I transfer my trust certificate to someone else?
The transfer of such an instrument is also exempt and does not require compulsory registration.
3. Which specific law generally requires this kind of registration?
Compulsory registration is normally required under sub-section (1) of section 17 of the Registration Act of 1908.
Test yourself
Q1.Under Section 38C of The National Bank for Agriculture and Rural Development Act, 1981, which documents are excused from compulsory registration?
Q2.Under Section 38C of The National Bank for Agriculture and Rural Development Act, 1981, in what situation would a National Bank trust certificate still require compulsory registration?
Q3.Under Section 38C of The National Bank for Agriculture and Rural Development Act, 1981, which other specific law normally requires the registration that this section bypasses?
Q4.Under Section 38C of The National Bank for Agriculture and Rural Development Act, 1981, what rule applies when an investor wants to transfer an exempt securitised debt instrument to another person?