The government is set to debut its 50,000 residential estates that will be auctioned online. These are estates on the endeavor or recovering debt tribunals that will allow banks to sell by auction after their loan repayment were not paid by the owners. The government website will give information on the floor area of the properties and let anyone to directly bid after paying earnest money using their credit cards.
According to the official that has knowledge about the auction, "We will list all such properties where there are no encumbrances and hold auction for them on an ongoing basis.As of now, we have around 50,000 residential properties which are ready to be auctioned." The goal of building a website and doing electronic auctions is to have the process clear and fair to bidders. "We have earlier received reports that in some cases auctions conducted by DRTs are controlled by certain groups."
Presently, banks promote the properties auction after the retrieval officers release the sale notice. The new website will delete banks from the auction process, though the profits will be transferred to loan recovery. To join the auction, a bidder will have to register on the website by sending the know-your-customer (KYC) detail, which has Aadhaar and PAN number. According to an Indian official, "The non-performing assets of state-run banks increased to 5.2% of their total outstanding loans at the end of March 2015 from 4.72% a year earlier, according to Reserve Bank of India data. Many of the debt recovery cases reach DRTs. Though DRTs are required to adjudicate on a case within 180 days, there are many which are pending for more than a decade."
Based on the finance ministry data, there were almost 59,000 pending cases before the countrie's 33 DRTs at the end of the previous year, engaging worth Rs 3.7 lakh crore assets. DRTs yearly disposal of 11,000 cases covering Rs 21,000 crore worth of loans. With new policies of debt recovery in place, more pledge assets will be gathered by defaulting borrowers is awaited to flood the market.
