Indian Overseas Bank (IOB) has signed up with Magicbricks, a realty portal for the e-auction of 500 plus re-possessed properties worth more than ₹800 crore. The e-auction will be carried out in two phases on October 21 and 30, 2019. The properties are spread across seven zones comprising Chennai, Coimbatore, Mumbai, Kolkata, Delhi, Bengaluru and Hyderabad. Out of the 500 plus properties, majority are from Chennai and Coimbatore, rest are spread across 12 major cities like Mumbai, Pune, Nagpur, Kolkata, Ranchi, Meerut, Lucknow, Ludhiana, Hyderabad and Bhopal.
These properties are mostly foreclosed under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002. When you buy a house with a home loan or take loan against property, you are supposed to pay back the loan with interest within a fixed tenure through equated monthly instalments (EMIs). However, SARFAESI Act allows banks and financial institutions to auction assets allocated as security against a loan, when a borrower fails to repay her loans as stipulated in the loan agreement.
Property seekers need to log onto auctions.magicbricks.com/bank/event/IOB to register for the e-auction and can participate by depositing the earnest money in their nearest IOB branch. Earnest money deposit is usually 10% of the reserve price (minimum price at which the auction of a property starts) of the property. EMD is kind of security deposit which shows that the buyer is serious in buying the property on auction. It is refunded back to unsuccessful bidders.
Remember, properties put up for e-auction would be given to you in whatever condition it is, so before you take part in auction, visit the property, evaluate the condition and derive the price point up to which you should bid.