Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
25. 1 [Asset reconstruction company] or secured creditors to report satisfaction of security interest.--(1) The 1 [asset reconstruction company] or the secured creditors as the case may be, shall give intimation to the Central Registrar of the payment or satisfaction in full, of any security interest relating to the 2[asset reconstruction company] or the secured creditors and requiring registration under this Chapter, within thirty days from the date of such payment or satisfaction. 3[(1A) On receipt of intimation under sub-section (1), the Central Registrar shall order that a memorandum of satisfaction shall be entered in the Central Register.]
- (2)4[If the concerned borrower gives an intimation to the Central Registrar for not recording the payment or satisfaction referred to in sub-section (1),the Central Registrar shall on receipt of such intimation], cause a notice to be sent to the 5[asset reconstruction company] or the secured creditors calling upon it to show cause within a time not exceeding fourteen days specified in such notice, as to why payment or satisfaction should not be recorded as intimated to the Central Registrar.
- (3)If no cause is shown, the Central Registrar shall order that a memorandum of satisfaction shall be entered in the Central Register.
- (4)If cause is shown, the Central Registrar shall record a note to that effect in the Central Register, and shall inform the borrower that he has done so.
Summary
- Creditors must notify the Central Registrar within thirty days when a debt is fully paid and the security interest is satisfied.,
- The Central Registrar enters a formal note called a memorandum of satisfaction in the records once the payment is confirmed.
- If a borrower tells the Registrar that a payment has been made but the creditor has not reported it, the Registrar will send a notice to the creditor.
- This notice gives the creditor a maximum of fourteen days to explain why the satisfaction should not be recorded.
- If the creditor fails to show a good reason within that time, the Registrar must record the satisfaction in the Central Register.,
- If the creditor does provide a valid reason for the delay, the Registrar records a note about the dispute and informs the borrower.
Practical examples
FAQ
1. What is the deadline for a creditor to report a loan payoff under Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?
Section 25 of the Act requires the secured creditor or asset reconstruction company to give intimation of full payment within thirty days.,
2. What happens if a borrower disputes the registration of a payoff under Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?
Under Section 25 of the Act, the Registrar will send a show cause notice to the creditor, giving them up to fourteen days to respond.
3. What does the Registrar record when a loan is fully paid according to Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?
The Registrar enters a memorandum of satisfaction in the Central Register.
Test yourself
Q1.Under Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, how many days does a creditor have to report a full satisfaction?
Q2.In Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, what is the maximum time a creditor has to respond to a show cause notice?
Q3.Comparing Section 24 and Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which is true about reporting?
Q4.Under Section 25 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, what must the Registrar do if a creditor ignores a show cause notice?