Demat account for land : All you need to know

Unclarified titles of land are a major obstacle in India's development. Unclear titles can lead to litigation, underuse capital and even fraud in home loans. The government wants to create a dematerialized registry of all land titles in order to address this problem. This is a demat account that allows land owners to own their land.

How would a Demat account for land work look?

In 1996, the country established a national bank to ensure that India appealed to foreign institutional investors. This was in response to the government's growing frustration with the piles of paper lying around. Ten years later, India's gross domestic products have exceeded the value of the electronic securities. It is now a thing of the past that shares were not delivered on time.

Owning a demat account to land use is a great way to do this. India's government wants to repeat the feat of the national depository on a larger scale for the entire nation. India's state governments took the initiative to capture electronic forms records for any type of land ownership. This electronic record is similar to dematerialization of securities.

The purpose of a Account for Land

India's lenders are willing to work with the Indian government to promote a central registry for equitable home loan mortgages. This will help prevent home loan fraud. Mortgage finance banks and mortgage lenders will be able run checks on the registry to determine if the title deed has been clear if this venture is successful. They will ensure that the title deed does not serve as collateral for another lender, or is registered in the name and address of another entity.

The government hopes that a central registry system will help in preventing home loan fraud. This is not enough. Clean state guaranteed land titles remain a problem. These land titles could still have a multiplier effect on India's limitation, as well as improving revenue, capital productivity, and governance.

The challenges of owning a Demat account for Land

Now, the challenge lies in ensuring that title is guaranteed to those who own immovable property. This policy has been so difficult that some countries, such as Sri Lanka and Thailand, have tried to implement it but have not been able to succeed. These nations are similar to India in that their land ownership has been vested with individuals for centuries and not with the government. In countries such as Australia and the UK, land is owned by the government. The Torrens system is dominant in such countries.

We now know what the Torrens System is. This system allows for the direct issuance of ownership to individuals by their states, rather than registering land ownership via registering deeds. This system was named after the premier of South Australia, who introduced it in 1858. This system was created to eliminate any uncertainty regarding who owned a piece land.

One suggestion is that the central government lead the creation of infrastructure, such as a central registry or depository, to keep track of all electronic records for millions of land and property deeds. These land deeds are available in electronic format and can be accessed easily by all States. States will need to use every administrative power they have to make sure the title verification process does not leak.

Are you a Demat account a good investment for India's future?

Rajasthan, a state in India, attempted to solve this problem by modernizing its legal and administrative infrastructure. Rajasthan had one goal: to manage the building blocks that created a central database of the State's landholdings and tax data. It also wanted to be able to track all transactions related with its properties. To confirm the dematerialization request, the property records were digitalized.

Final step would be to make public any title information with the aim of resolving any conflicts. The state then suggested that the title be guaranteed for three years following the Demat request in order to resolve any disputes. This proposal is currently on hold due to a change of governance.