1.What is NPA?
Banks declares creditors non-performing asset after loan or interest is overdue for period of 90 days bank declares creditors as non-performing asset (npa)
2. What is SARFAESI Act?
Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest. In these act banks and financial institution or lender has powered to recovered their dues from creditors by selling there secured collateral asset, once the account classified as NPA after period of 60 days bank has powered to take possession of secured asset kept as collateral by issuing demand notice 13(2)(no borrower shall, after receipt of notice referred to in sub-section (2), transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor)and 13(4) ( under section 13(4), after the accounts are being declared as NPA and the representation of the borrower/guarantor is rejected, the secured creditor (i.e. bank or fi) can take recourse to any of the measures specified therein to recover its outstanding debt)notices for possession. Lender may also take or approach CMM order/DM order (chief metropolitan magistrate/divisional magistrate) for physical possession of the assets. It’s easy for banks to sell the asset in physical possessions.
3. Can we buy bank auction property?
Yes, we can buy bank auction properties through online auction or tenders.
4. What’s difference between symbolic and physical possession?
In symbolic possession banks doesn’t have physical possession of the assets but bank can auction the asset may be still in symbolic its preferable and suggested to buy physical possession properties only.
5.What are CMM/DM order?
CMM order is Chief Metropolitan Magistrate/Divisional Magistrate and additional chief metropolitan magistrate are courts of the same status having the same and identical jurisdiction as far as criminal trials are concern.
6. Any dues or encumbrance who will pay?
Any asset sold under SARFAESI action is sold on an as is where and as is what basic any pending dues on asset have to borne by buyers eg. property tax, society charges light bill or any other charges all due diligence has to be carried out by the buyer before paying the EMD or participation sale under SARFAESI act is governed by the terms and condition of sale forming part of the sale forming process.
Most important is KYC registration bidder has to upload KYC document along with EMD money, PAN Card, Aadhar Card for add proof cancelled cheque and declaration/annexure as per banks property or asset will be transferred or registered only in that name who’sKYC has been registered while participating in auction as sale certificate will be issued as per KYC registration you can participate by joint name also by uploading the KYC of both bidders.
8. Reserve Price (RP)
Reserve price is the minimum price assigned by the bank for a given property to be auctioned.
9. EMD amount
25% Earnest Money Deposit or EMD is the deposit money required. 10% to be paid in advance for participating in bank auctions and 15% to be paid after auction in case of highest bidder (h1) of the reserve price
10. EMD refund / forfeit
Ans: After paying 10% EMD and KYC registration you will able to login and participate in online auction if you are highest bidder (h1 bidder) you have pay 25% (included 10% EMD) of total sale amount as sale process it’s important to pay 15% and balance 75% amount within stipulated period as bank or the 10% amount will be forfeited and bank cans sale property in auction again. And if you are not h1 bidder your 10% EMD amount will be refunded in your account in 4-5 working days
How to participate in auction
Login to vibrantauction.com Step 1-Search property of your choice Step 2- Bank auction notice Step 3- Inspection of property Step 4- Due Diligence/Legal Search Step 5-10% EMD-deposit and KYC registration Step 6- Auction bidding/auction participation Step 7- On highest bidder (h1) deposit-15% (total 25% including 10% EMD) Step8- Sale approved letter Step 9-Balance consideration amount to be paid from 15 days to 90 days depend on financial institute Step 10- On final sale certificate Step11- Pay stamp duty and registration your documents at registrar office Our dedicated team will help buyers to search and purchase property in auction of their choice.