By Admin 
RBI New Rule: Reserve Bank of India i.e. RBI has issued new rules for banks. Under which, if a bank has taken possession of land, house or other immovable property of any person or company during the recovery of loan, then it will not be able to sell it back to the same borrower or people associated with him.
What did RBI say?
Regarding this decision, RBI said that generally banks do not keep non-financial assets (like land or house) with themselves. But when a loan is not repaid for a long time and it becomes NPA, then banks can take possession of the mortgaged property through legal process.
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What do the new rules say?
According to the new rules, the bank will have to sell such property through public auction as soon as possible. However, in any case the bank will be able to keep such assets with itself for a maximum of 7 years only.
When will the rule come into effect?
These new rules by RBI will come into effect from October 1, 2026. Along with this, some people had suggested to the Central Bank that the defaulting borrower should be allowed to buy his property again, but the Central Bank did not accept it. RBI says that by doing this people may deliberately try not to repay the loan and this will weaken the discipline in the banking system.
Also, when banks take possession of such property, its value will be estimated by at least two freelance valuers and on that basis it will be recorded in the accounts. If the bank later starts using that asset for its own work, then it will be removed from the category of non-financial asset and recorded as fixed asset.
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