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Going once, going twice…. SBI plans massive online auction of 300 properties

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State Bank of India (SBI), the country’s largest lender, is holding a massive online auction this weekend to sell repossessed flats, warehouses and offices worth a total of nearly $200 million, reports Mint. The publication added that sale includes 300 commercial and residential properties from 24 cities in India, many of which was put as collateral by entrepreneurs and and were taken over by the bank under the Security and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act due to non-payment of pending dues by the borrowers.

The lender seems to have tied up with online real estate portal Magicbricks for the same and has a separate webpage for the properties on the block. The website has four headers for apartments, residential houses, residential plots and commercial spaces. The website also allows you to search for the properties by cities and  provides details of the borrowers. The minimum asking price of the real estate will be in the range of Rs.1,000-1,200 crore in total, an executive said.

SBI on its website says that bidders need to have a valid digital certificate with an e-auction login id and password. It also states that the bidder has to communicate with the bank through their registered email id.

SBI is looking to clean up its books and reduce the number of non-performing assets (NPAs) and reduce the provisions it has to make for bad loans which eat into its profits. For the quarter ended December, SBI had reported a gross NPA level of 4.9% of its total loan book or Rs 61,991 crore (pdf).

It’s also worth noting that the Madras High Court last year had passed a judgement that e-auction of Non Performing Assets (NPAs) will not be challenged.  The ministry of Finance had made it mandatory for all commercial banks to move from physical auctions to e-auction mode for all NPA cases under the Debt Recovery Tribunal a while back. In the Madras High Court case, the petitioners argued that the SARFEISI Act  does not allow e-auction while it permits public auction, due to which  e-auction should be considered illegal. The petitioners also claimed that there was no transparency in the e-auction process. They also argued that people in rural areas will not be able to participate in these auctions due to low literacy level.

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ