By Admin 
- This will increase transparency, prevent ‘setting’, common buyers will benefit.
RBI Rules: The Reserve Bank of India (RBI) has adopted a very strict stance regarding the sale of seized immovable properties – land, house or shop – in case of loan default. The central bank said on Thursday that now banks will have to sell immovable assets acquired in exchange for bad loans within seven years. This sale should be done through public auction under the rules of ‘Securitization and Reconstruction of Financial Assets and Enforcement Security Interest’ (SARFAESI) Act.
The ‘setting game’ is over now
Under its new decision, the Reserve Bank said that the bank cannot sell these properties back to the same defaulter, his relatives or any party associated with him. RBI has completely rejected the suggestion given by the banks, in which the borrowers were asked to be given a chance to buy back their property.
The purpose of this step of RBI is to bring transparency in the banking system and eliminate setting games or corruption. Earlier, many influential defaulters used to deliberately default so that when their confiscated property would be auctioned, they would purchase it through a relative, business partner, friend or a benami company by placing a low bid. With this, their old debt will also be cleared and the property will also remain theirs. The new rule of RBI is an attack on this game of setting.
Fixed time limit of 7 years
According to the new RBI rules, banks cannot retain any seized assets forever or indefinitely. They will have to sell it within seven years.
impact on general public
This new rule of RBI will prove beneficial for common buyers because the process of public auction will be completely transparent. The general public will also get a chance to buy land or house at market price in the auction. This will also reduce the tendency of not repaying the loan. When banks will get their money at the right time, the process of taking loans will become easier for common customers in the future. Its effect can also be seen on interest rates.
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