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Home Technology India Banks using online technology to clear dues

Banks using online technology to clear dues

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Real estate auctions by banks are available online at a rate cheaper than the market.
 
When borrowers fail to repay loans, banks auction the property to recover dues. These auctions take place under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
 
Banks and financial institutions have tied up with online real estate sites such as indiaproperties.com and Arms, the retail debt recovery arm of asset reconstruction company Arcil. Over the past year, both have collectively auctioned almost 1,500 properties across India, the majority being residential.
 
The initial part of the bidding process is similar to offline auctions. Thirty days prior to the date of the auction, advertisements are published in at least one English and one regional daily. Additionally, auctioneers contact brokers in the catchment area of the auctions to spread the word.
 
To participate, interested parties must give their bids in a sealed envelope to the auctioneer, along with a certain percentage of reserve price as earnest money deposit. The amount is refundable if one withdraws from the process or does not win the bid.
 
For online auctions, they must also give a separate bid form, requesting a log-in address and password.
 
“These are different from an offline auction in the way they are conducted,” says Amit Shah, VP (auctions), indiaproperties.com. On the given date, at a pre-specified time, bidders must log in to the website with the address and password issued to them. The bidding takes place live. All participants can view the bids placed by others and, accordingly, revise their own.

 

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