Titling Act to address banks'concerns on property fraud

The State-Level Bankers' Committee (SLBC) has been told that several provisions in the proposed Land Titling Act would address its concerns about fraudulent transfer of mortgaged property to a third party.

This assurance has come from the State Government in response to SLBC requests for pursuing options with regard to leveraging the National Mortgage Repository (NMR).

PROPERTY FRAUDS

The NMR issue has been engaging the attention of both the Government and the Indian Banks' Association as a means to bringing in more transparency in property transactions and preventing attendant frauds.

Banks have come across instances where borrowers have used the same property papers not only to borrow from different banks, but also from different branches of the same bank.

The mortgage repository will preserve information on borrowers' loan servicing and repayment record and maintain a database of properties against which owners have availed themselves of loans.

In this connection, banks have agreed to share details of the mortgages and borrower profiles with the Credit Information Bureau of India Ltd.

DECISION PENDING

The NMR would function analogous to the registry at the Motor Vehicles Department, which grants registration as imprinted on the owner's Registration Book.

It also draws a parallel with the functioning of the Registrar of Companies which makes available details pertaining to a company.

The SLBC has been tracking the matter actively since 2008 with the State Revenue Department, an official spokesman said, and a decision had been pending ever since.

It is in this context that the Revenue Department has come to flag the issue of the Land Titling Act, which could address the fears that SLBC has been airing.

The Act aims to ensure conclusive title to every land holder. Conclusive title means an unchallenged title; any legal challenge of the same would not stand in a court of law, the SLBC was told.

INDEMNiFICATION

Assuming that a challenge is mounted, the Act behoves on the State Government to indemnify the affected party, which is the land holder.

But, to reach this stage, certain caveats are in place. For one, land and survey records need to be reliable, up-to-date and tamper-proof. Survey records and maps must reflect the same as the revenue record suggests.

The Registration Department must be capable of making an online record based on the same record lying in the revenue and survey data. Basically, they have to accept and function under a common database.

The draft land titling Bill envisages that a land titling agency function as a Government Department and all the relevant offices be brought under one umbrella so that they all draw from the same database.

COMMENT NOW