RBI New Proposal on Loan Recovery: If loan is not repaid, property will be confiscated, RBI proposed

Lucknow: Have you taken a loan from the bank and are not able to repay it? Or are you an investor who keeps an eye on the banking sector? So this news is very important for you. Reserve Bank of India i.e. RBI has presented a big draft of new rules related to loan recovery for banks and NBFCs.

Till now, banks were often stuck in legal complications, but now according to the new proposal of RBI, if a loan becomes NPA (bad loan), then banks will be able to directly take possession of the immovable properties like mortgaged land or house for recovery. In technical language these will be called SNFA (Specified Non-Financial Assets).

But wait! There are also some strict conditions for banks here-

• Banks cannot sit as owners of these assets forever. In any case, they will have to sell the property within 7 years of taking possession.
• RBI believes that by selling assets in a timely and transparent manner, banks will get maximum of their money back.
• These rules will be applicable only when all other avenues of recovery have been closed.

RBI has put a strict rule to prevent any kind of ‘setting’ or manipulation in this game. Banks will not be able to sell this property back to the same borrower or anyone associated with him. That is, defaulters will no longer be able to play the game of buying back their own property at a lower price.

RBI has sought suggestions on this draft from the general public and experts till May 26. Only after this it will be finalized. It is clear that this is a big step towards making the banking system clean and removing the stuck money from the banks.