Archive · 19 Jul 2026
RBI's New Rules on Bank-Seized Properties
The Reserve Bank of India has made new rules about what happens when banks take your house or other property because you couldn't pay back a loan.
These rules say banks can't keep the property forever.
They have to sell it within seven years, usually through a public auction.
The bank also has to decide how much the property is worth using special rules.
One important rule is that the person who couldn't pay back the loan can't buy the property back from the bank.
The RBI thinks this would not be fair to other people who pay their loans on time.
RBI's new framework governs the management of immovable properties acquired by banks during loan recovery.
Banks must dispose of such properties within seven years through public auctions.
Borrowers cannot buy back the seized property from the bank.
Properties must be valued at the lower of the net book value or distress sale value.
The framework aims to ensure transparency and timely disposal of acquired assets.
- Who
- Reserve Bank of India (RBI)
- What
- New prudential framework for bank-seized properties
- When
- Effective from October 1, 2026
- Where
- India
- Why
- To ensure timely disposal and transparency in managing immovable properties acquired by banks during loan recovery
- Effective Date
- October 1, 2026
- Maximum Holding Period
- 7 years
- Disposal Method
- Public auction
- Valuation Method
- Lower of net book value or distress sale value
- Borrower Buyback
- Not allowed