In order to provide banks and financial institutions better realisation of their non-performing assets (NPAs) and to stop the intervention of local cartel/s from freezing the sale of NPA bids in a low value, an e-auction website has been floated by a registered NPA recovery agent. This would limit the intervention of local brokers and real estate thugs who form a cartel at local circle and regional level to prevent outsiders from bidding.
Claimed to be first-of-its-kind website in India on the NPA recovery auction site Reyvish b serve.com assists the users, bidders and participants in the easy application of technology which is fool proof as it prevents fake bids, said Reyvish Associates Private Limited executive director N Srinivasan. Reyvish Associates Private Limited is one of the leading NPAs recovery agent of around 12 banks and financial institutions.
?More importantly it helps to avoid cartels from exploiting the situation to freeze the sale in a low value while helping the banks and institutions to achieve better realisation out of their NPAs sale. The asset on block is exposed and offered to global bidders too,? Srinivasan said.
There have been incidents where local thungs and real estate barons who in connivance with local politicians and other politically influenced persons not only prevent outsiders from bidding but also ensure that the bid price be kept only marginally higher over the reserve price of the NPAs, he highlighted.
?With the muscle power and political support, the local cartels at times bring in their own people to buy the NPA assets at a price of their choice and then sell the same to outsiders with better margins,? Srinivasan said. ?This scenario prevails across all the states. With the intervention of cartels, banks tend to lose anywhere between 10% to a maximum of 40% on the sale value of NPAs. In order to avoid mounting NPAs and to show better performance, banks and FIs at times forced to end up realising only little margins over the reserve price of their NPAs.?
After taking into consideration all these aspects, and with the support from banks and FIs, the company has decided to float an e-auction website wherein it effectively bridges the gap between buyers and sellers at an affordable cost. The auction site would send the list of properties for sale in its agenda to the registered users and would organise the sale at the desktop of the seller.
?We will provide the clients with services such as registering the assets/name transfer of the property, lifting the machinery/vehicle from the one place to another place, police protection if any threats from local cartels, legal assitance through its own lawyers to solve the crisis and other basic services,? he said.
The company, which has helped banks and FIs to recover over Rs 300 crore NPAs in the last six years, has assets of over Rs 120 crore under its belt and keeps adding more. ?With the launch of this website, we will expand our reach to other states and set up offices to take up NPAs of regional banks,? he said.
