'Baanknet' Portal Revamps; Investors Can Access E-Auction Information By Public Sector Banks In One Place

The government has launched an integrated portal for the e-auction of properties, simplifying the process for buyers by consolidating property details in one place. On January 3, 2024, M Nagaraju, Financial Services Secretary, launched the ‘Baanknet’ portal for e-auctioning properties such as commercial estates, shops, plant and machinery, agricultural and non-agricultural land, vehicles, and more. The portal aims to provide comprehensive information on assets to be auctioned by public sector banks (PSBs), allowing buyers to easily access all auction-related details in one place. This initiative is expected to make the property auction process more efficient, convenient, and faster.

When Do Banks Auction A Property?

Banks are permitted to auction mortgaged properties of loan defaulters under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) as per the rules prescribed. Under the provisions, the bank can take possession of the mortgaged property if a borrower fails to pay back the loan, without involving the court for this purpose. 

Banks auction the property when a borrower defaults on paying loan EMIs three consecutive times. A bank sends a 60-day notice to the borrower asking for a response on why the property should not be auctioned. It seizes the property if the borrower does not make the payment or reply to the bank explaining a suitable reason for missing the payment. If the bank finds the response acceptable it withdraws the notice; otherwise, it puts the property on the auction list. The purpose of auctioning the asset is to recover the loan amount and reduce the non-performing assets (NPA) of the banks.

For auctioning, banks publish the list of to-be-auctioned properties on their websites and in newspapers. However, for investors, it is a cumbersome and time-consuming exercise to visit different banks’ websites to check the properties. The ‘Baanknet’ portal addresses this issue and offers a solution to buyers and investors, starting from identifying a property to bidding for it.

Through this portal, buyers and investors can also enjoy features, like automated and integrated payment gateway and KYC tools, a dashboard showing ‘Spend Analytics’ and ‘MIS Reports’, and a dedicated helpdesk with a callback request facility where users can request a callback instead of waiting on the call.

How Will The Baanknet Portal Help?

This ‘frictionless user journeys’ – a single portal offering services starting from pre-auction, auction, and post-auction in a single application, is expected to improve the user experience and make the process faster aiding banks to recover their dues. 

“This platform is expected to enhance the overall economic environment by unlocking the value of distressed assets and boosting investor confidence. With the use of technology, this process will be more transparent, efficient, and accessible”, said Nagaraju, as reported by PTI.

As per the Press Information Bureau report dated December 15, 2024, the public sector banks’ asset quality has improved significantly over the years, with reduced NPAs. The gross NPA ratio of PSBs declined to 3.12 per cent in September 2024 from 14.58 per cent in March 2018.

The Baanknet portal is expected to further improve NPA ratios through a faster and more convenient auction and bidding process. Notably, more than 1,22,500 properties have already been migrated to the new portal for auction.