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Buying property through auctioning from Bank!
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Buying property through auctioning from Bank!

Last few days there were advertisements, inserted in the first page of leading dailies by State Bank of India, auctioning their stressed assets. The assets are wide ranged from Individual houses, Plots, Flats, Agricultural lands, Gold Jewels etc. For the last 2 years, we saw all financial institutions stressed and burdened with high NPA’s. Instead of writing it off or sell those assets to Asset Reconstruction Companies(buyers of these bad loans), banks have come forward on auctioning on their own, to balance the profitability and decrease loan loss reserves.

Just browsed through all the properties mentioned in the site,( http://www.sbi.co.in/portal/web/home/bank-e-auctions) all were high NPA’s, assets ranging from 1 crore and more. Most of the assets are pledged by industries or companies. Very few by individuals. Its a good oppurtunity, to buy those properties at a good price, less than what market quotes. Not sure how the process goes inside!

Mostly its safe to buy a asset auctioned by banks, as they were scrutinized at all levels, before lending the loan. Assets like that, will give investors a hazzle free mind, to buy. When you google, you get lot of websites where you can find good deals. At the moment, they have listed only high value properties which are in crores. But this is a oppurtunity, good step, where we can also see low value, affordable deals in the future.

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Keep an eye over this. This is going to be a good business for investors/ traders who can flush money !
This is same for gold auctions. The NBFC’s not only gain by lending money against jewels, they also sell or retain gold and make huge money.

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