SBI to e-auction distressed properties every quarter now

After failing to get the desired results in its maiden e-auction of distressed properties in March, State Bank of India has decided to separately auction commercial and retail properties under its hold from next month.
The bank has also decided to hold such e-auctions in the middle of the last month of every quarter.
Accordingly, the first e-action for distressed properties will take place in mid-June.
"We have decided to hold e-auction of distressed properties every quarter separately for retail properties meaning mostly residential ones and for commercial properties.
"Such actions will happen in the middle of the last month of every quarter. So mid-June will see a new auction," SBI chairperson Arundhati Bhattacharya told reporters here after launching contactless credit and debit cards.

She, however, did not specify how the bank is planning to raise or how many properties would be put on the block, saying the details are being worked out.

It can be noted that in the e-auction conducted on March 14, which was an industry first, the bank could sell only 124 properties, mostly residential ones, out of the 300 distressed assets put on the block, realising just about Rs 100 crore, way below its target of Rs 1,200 crore.
"We sold around 130 properties, largely residential through the e-auction process, realising about Rs 100 crore," deputy managing director, stressed asset management group, Parveen Kumar Malhotra had said after the auctions.

This was strange as the bank was forced to extend the auction timing due to heavy demand from the retail side, which was evident from the sale proceeds as all the 100 residential properties put up for sale were snapped up.
This was the maiden attempt by SBI, which has been fighting a long battle to contain bad loans, to dispose of distressed properties through an e-auction.
SBI had put on block around 300 properties worth Rs 1,200 crore, including offices, shops, factory buildings and residential apartments spread across 25 cities including the four major metros through an e-auction.
The auction was carried out through the property portal Magicbricks.Com. The process was conducted by e-procurement solutions providers C1 India and Auction Tiger.

These properties came to SBI as they were collaterals plegded by borrowers for housing or other business loans. But the borrowers defaulted on repayment, forcing the bank to take over them under the Security and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
The auction was aimed at bolstering the bank's attempts at bad loan recovery. SBI had reported a gross non-performing asset ratio of 4.9 per cent in December quarter and net NPA of 2.8 per cent. The lender will be declaring the March quarter earnings on May 22.