Public sector bank Indian Overseas Bank (IOB) will be e-auctioning more than 500 re-possessed properties worth over Rs 800 crore located in Chennai, Coimbatore, Mumbai, Kolkata, Delhi, Bengaluru and Hyderabad.
The mega e-auction will be carried out in two phases on October 21, 2019 and October 30, 2019. The public sector bank has tied up with Magicbricks for the e-auction.
The properties are spread across seven zones comprising Chennai, Coimbatore, Mumbai, Kolkata, Delhi, Bengaluru and Hyderabad. Out of the 500 plus properties, majority are from Chennai and Coimbatore, rest are spread across 12 major cities like Mumbai, Pune, Nagpur, Kolkata, Ranchi, Meerut, Lucknow, Ludhiana, Hyderabad and Bhopal, the web portal said in a statement.
Property seekers need to log onto auctions.magicbricks.com/bank/event/
IOB to register for the e-auction and can participate by depositing the earnest money in their nearest IOB branch. The properties put up for e-auction are on "as in, where in" basis.
"Online platforms have emerged as key driver for the real estate industry. The property buying process is now significantly impacted by digital engagement. With growing internet penetration, trend towards e-auctions of properties has picked up speed in India," said K Swaminathan, Indian Overseas Bank’s Executive Director.
For the uninitiated, e-auctions of properties are organised to recover the amount due from the borrower. What happens is that if a borrower fails to honour his home loan, banks start the legal process to repossess the property which they sell at an e-auction.
If the borrower defaults on his loan for six continuous months, he is given a 60-day notice period but if he still fails to repay, banks issue another 30-day notice period. In case the borrower does not pay even during this period, his loan is declared part of the bank’s non-performing asset (NPA). These properties are auctioned to recover losses under the Sarfaesi Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002).
It is generally a distress sale because the aim behind holding the bid is primarily to recover the partial amount of the property. The market price of the property in the area will always be higher than the value at which the bank had loaned the property.
Properties are valued by a professional valuer before the auction. The valuation is generally conservative as banks only try to recover the amount that is outstanding.
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