Over 1 lakh e-auctions for NPA properties expected in 2013-14

B S :Priya Nair  |  Mumbai  April 15, 2013 Last Updated at 15:39 IST

Retail, agricultural, commercial and industrial NPA properties to be e-auctioned

Indian banks are expected to conduct over one lakh e-auction transactions during financial year 2013-14 to sell properties of Non-performing Assets (NPAs), 

Residential, agricultural, commercial and industrial properties are likely to be sold through the e-auction route, with the first two accounting for the largest number in terms of transactions,

With the Ministry of Finance making it mandatory for all commercial banks to move from physical auctions to e-auction mode for all NPA cases under the Debt Recovery Tribunal (DRT), there will be a spurt in e-auctions in 2013-14. Also, the Ministry of Finance wants that NPAs under SARFAESI Act (The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002) should gradually move to the e-auction mode, but has not made it mandatory.

The focus of most banks now is on recovering dues from NPAs, as they have started impacting their profitability and margins.

As on March 31, 2012, net NPAs of 40 listed banks were Rs 61,558 crore, which rose to Rs 92,398 crore as on December 31, 2012, the release said.

Explaining the advantages of e-auction over the physical process, D K Jain of NPAsource.com said, “E-auctions offer multiple advantages like lower cost, greater participation, it saves time and allows better price realization for banks. Any interested party from India or even abroad can register themselves under the Reserve Bank of India regulations and participate in an e-auction of NPAs unlike the physical auction system where the interested parties have to travel to the venue where it is going to take place. This automatically leads to a significant increase in the number of participants, reduces costs and eliminates or curtails manipulation by a small cartelised group.”

Until now, most banks were not participating in e-auction due to the lack of technological know-how and competence. But now various online portals are offering these services, Jain added.

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