NPA properties galore, individual defaults is all time high

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By Staff Reporter

As per RBI recent report total NPA exposure to all banks and financial institution is touching Rs28L crore. Huge spurt in forming Assets Reconstruction Company (ARC) as per RBI norms are mushrooming in financial sector. Reason? ARCs can get the bad loan in a discounted price from banks in a private treaty. When banks fails to recover the loans, they send the institutional debt for ARCs. A new way for securitisation.

Almost all big banks, financial institutions and many entrepreneurs have established ARCs to loot the discounted properties. Making a cotery amongst themselves to convert the NPA into discounted properties and sell to affiliated ARCs for securitisation of debt.

NCLT courts are busy with listening the plea of financiers as Financial Creditors u/s 7 to either revive Real Estate in the name of looting someone’s project or liquidating for a favourable bid. This is for real estate projects being defaulting in paying their loans to financial institutions.

For individual loans, public notice galore in newspapers and on banks’ webportals as individual properties on sale by the banks themselves and not to ARCs. Mostly these flats and partments are on the outskirts and discarded properties or properties with litigation on “As is where is basis”. Properties which do not have buyers are put on public domain. Dearer properties like in CBD areas and city centres are sold on private treaty with banks to “affiliated” investors and cotery / nexus with the bank officials and brokers.

In all, huge NPA properties under various stages of liquidation touching real estate market which definitely affect the regular real estate amrket and price trend.

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