Role of Recovery Agents in Auctioning NPA Properties in India

In India, a recovery agent plays a crucial role in the auction process of Non-Performing Asset (NPA) properties, helping banks recover outstanding loans by selling the secured asset. The process begins with the agent contacting the defaulter to discuss repayment options, aiming to settle the debt before resorting to an auction. If the borrower fails to repay, the agent issues legal notices warning of the upcoming auction.

In cases where repayment is still not made, the recovery agent may take physical possession of the property under the SARFAESI Act, which allows banks to seize assets to recover dues. The agent then advertises the auction in newspapers and online platforms to attract potential buyers. During the auction, the agent ensures a transparent and fair process, managing the bids and selecting the highest bidder.

After the auction, the agent facilitates the handover of the property to the successful buyer. Throughout the process, recovery agents must act ethically, adhering to the guidelines set by the Reserve Bank of India (RBI), and follow the procedures outlined under the SARFAESI Act, ensuring no harassment or intimidation of the borrower.