RBI bars banks from selling recovered assets back to defaulters
Business
The Reserve Bank of India, or RBI, just told banks they cannot sell properties they've taken back during loan recovery to the same borrowers who defaulted.
The RBI says letting defaulters buy their stuff back isn't fair and could mess with credit discipline.
This rule comes after feedback on draft norms issued earlier in May and is all about keeping things cleaner in the banking system.
RBI sets disposal timeline and rules
Starting October 2026, banks have up to seven years to sell off these recovered assets, preferably through public auctions, so everyone gets a fair shot.
The RBI also set clear guidelines for how these assets should be valued and recorded, aiming for more transparency and accountability across the board.