In a significant step towards greater transparency and accountability, the Reserve Bank of India (RBI) has asked lenders to provide comprehensive information about borrowers whose secured assets have been taken into possession in accordance with the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The same is intended to give prospective buyers important information on the assets up for sale or auction, to help them make informed decisions.
The directive applies to various financial institutions, including commercial banks, urban co-operative banks, state co-operative banks, central co-operative banks, all-India financial institutions, non-banking financial companies (including housing finance companies), and asset reconstruction companies.
The REs are mandated to upload borrower information on their websites in the format provided by RBI. The information to be shared by banks includes borrower name, guarantor name, borrower’s address, guarantor’s address, outstanding amount, asset classification, date of asset classification, details of security possessed, and the name of the title holder of the security possessed. The first list containing details of secured assets possessed under the SARFAESI Act, 2002, must be displayed on REs’ websites within six months from the date of RBI’s circular. Subsequently, this list should be updated on a monthly basis.
These guidelines were revised by the Board after considering orders pronounced by Courts and feedback received from the stakeholders. RBI emphasised that sharing this information will aid potential buyers in evaluating assets for sale or auction by lenders, contributing to greater transparency in the process.