Pune: Kondhwa police have booked a couple, their two sons and five relatives for allegedly breaking open a flat sealed by a private bank over a loan default at Shivnerinagar in Kondhwa and confining the watchman deployed to guard the property. The manager of the private bank from Wanowrie lodged a complaint with the Kondhwa police station.
On July 15, the family members allegedly visited the building and threatened the watchman with a knife. They broke open the locks and seal of the flat. They forced the 45-year-old watchman into the flat, where they locked him inside. After confining the watchman, who remained locked in the flat for nearly 6 hours, they allegedly went to the bank, where they threatened and abused the bank manager.
The bank manager resisted them and raised an alarm. The bank officials then reached the building and rescued the watchman,” police said. According to the Kondhwa police, the family had purchased a flat in the housing society a few years ago. For this, they had taken a loan from a private bank. The family initially paid the EMIs, but later defaulted on the loan repayment. The bank subsequently issued notices to the family and later sealed the flat. The bank also deployed a watchman to prevent any trespass into the property,” police said.
What are RBI Guidelines related to seizure of property by Banks?
The Reserve Bank of India (RBI) mandates strict guidelines for banks seizing and sealing immovable properties under the SARFAESI Act or NPA norms. Lenders must provide formal notice, cannot sell seized properties back to the defaulting borrower, and must strictly conduct sales via transparent public auctions within a maximum of 7 years.
Key RBI Guidelines & Procedures:
- NPA Classification: Banks can only initiate the sealing/taking-over process of an asset after the loan account has been officially classified as a Non-Performing Asset (NPA).
- Statutory Notice Periods: Under Section 13(2) of the SARFAESI Act, the bank must send a 60-day notice to the borrower to clear the dues before taking any physical possession or sealing the property.
- Physical Possession & Sealing:
- Banks must issue a Possession Notice to the borrower and affix it prominently on the property.
- The property must be sealed in the presence of an independent witness and a designated Authorized Officer.
- An inventory of all items inside must be prepared and documented.
- Prohibition on Buy-Backs: Banks are explicitly barred from selling recovered/seized immovable properties back to the defaulting borrower or any of their related parties.
- Public Auctions: Seized assets must be disposed of primarily through transparent public auctions.
- Strict Timelines: Banks are not permitted to hold on to sealed properties indefinitely; they must liquidate them within a maximum period of seven years.
- Fair Valuation: Upon acquiring the property, the bank must value it at the lower of the net book value of the loan or the distress sale value assessed by at least two independent external valuers.
