The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which lets banks and eligible lenders take possession of and sell a mortgaged property without going to court when a loan turns bad.
How it works and what to check
After a loan is classed as non-performing, the lender issues a 60-day demand notice. If the borrower does not pay, it can take possession and sell the property, usually by e-auction. The borrower can challenge the action before the Debts Recovery Tribunal.
Bank auction properties can be good value but are sold 'as is where is', with any dues and occupants. Check the title, physical possession and outstanding taxes and society dues before bidding.
Common questions
Is it safe to buy a bank auction property?
It can be, if the bank has physical possession and the title is clean. Read the sale notice and inspect the property first.
Does SARFAESI apply to agricultural land?
No. Agricultural land is excluded from enforcement under the Act.