Internal document

Standard Operating Procedure ( SOP)

Details:
Process Online Auction for Movable Assets
Date Sep 25, 2019
Version Ver 2.0/Online Auctions/0919
Product All products with movable assets

Scope: Broadly define activities involved in auction for movable assets after possession through
the mode of online auctions

Steps Process Steps FPR TAT Deviations if any

Sr.No
1 The Bank will empanel reputed Central Team NA
Online auction sites before starting
the activity for auction of assets.
2 The SL/RL/Central team will refer Central team T-7
to the valuation report/s to arrive
at the base price (floor price for
starting auction).

For any reason such as lower bids

than floor price in previous
auctions, if the floor price has to be
changed, due approvals from the
National Collection Manager or a
higher authority have to be sought.
The previous base price, valuation
amount and valuation date to be
mentioned along with proposed
base price, for seeking relevant
approval.

The list of assets for disposal will Central team T-5

be shared with the empaneled
Online auction sites.

3 The auction sites will intimate all Auction site T-4

their registered buyers
for oncoming auction schedules
atleast the day prior to auction.
Any exceptions to be approved by

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NCM.

4 Since it is important to anticipate Auction site T

buyer psychology based on
product mix, RL/ Central team
may instruct auction site to hold an
open (highest bid known) or closed
auction (highest bid not known) to
ensure higher bids. In case of
unsold assets or those with low
demand, it may be a strategy to
offer the asset without a floor price
(start price '0') to create a buyers’
interest and therefore reach the
potential market price of the assets.

However, all auctions will be held

with the condition of ‘Subject to
final approval of Bank’

5 The auction will be held for a Auction site T

minimum of 4 hours with a
standard start time of 12 noon to
ensure transparency in the process
and allow buyers adequate time to
login and offer their bids.

The auction can be extended to

attract higher bids, since most bids
are put at the last minute

6 All auctions would be subject to Auction site T

approval from Bank. In other
words, the auction site will inform
the highest bidder that the bid is
subject to approval from Bank.

The auction site will send the

auction completion report giving
details of the bids and the top 3
buyers.
7 The Central team will collate the Central team T+1
reports and forward to the
appropriate authority (based on
authority matrix as per amount of
loss) for approval.

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8 Once approved by the appropriate RL/Central team T+3
authority, the same will be
informed to the Auction site.
The auction site in turn will inform Auction site T+4 to 11
the Buyer that their bid has been
approved and to make the
payment within stipulated
timelines.

Payment to be accepted beyond the

stipulated timelines days, will need
to be approved by the relevant
approving authority.
9 The auction site will provide a Auction site T+4 to 11
winning bid letter to the Buyer.
10 The Buyer is required to submit the CP/ATL/SL T+4 to 11
winning letter, KYC including self-
attested PAN card and the
payment.

CP/AL/SL to ensure to check the

credentials and collect the KYC
copies, PAN card copy of the buyer
before accepting payment.

Payment should be in Cheque /

PO/DD/ Funds transfer /
RTGS/NEFT or any digital mode.
Cash to be avoided.

In exception scenarios, buyers can

send their representatives to make
payment / collect delivery orders.
However, they should carry proper
authority letters with their
specimen signatures on the letter,
their own original KYC and self-
attested copies. These copies
should be validated with the
original and also collected along
with Buyers documents

11 An indemnity should be signed by CP/AL/SL T+4 to 11

the Buyer for taking delivery of
asset and ensuring change of

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registration to own name within a
reasonable period.

This indemnity should be signed

by the Buyer and collected along
with the KYC and PAN copies, at
the time of taking the payment.
12 After clearance of payment, CP/AL/SL T+11 to
CP/AL/SL to ensure loan is closed 18
and NOC along with RTO
documents is released by
Operations
13 The NOC, RTO set and the delivery CP/AL/SL T+18 to
order to be handed over to the 24
buyer. An acknowledgement to be
taken from buyer on all copies and
same to be filed along with Repo-
kit.
14 Yard will check the delivery order, Yard T+18 to
KYC of the buyer and the email 24
before giving delivery of the asset
to the buyer
15 In case the highest bidder fails to CP/AL/SL/RL/Central NA
make payment within the period, team
an opportunity may be given to the
2nd highest bidder. If 2nd highest
bidder does not show interest, then
the 3rd highest bidder to be given
opportunity to make payment.

Post approval, the 2nd highest or 3rd

highest bidder can make payment.

This option is in strictly exception

situations.

Guidelines / Conditions:

1. Auction vendor should be empaneled with the Bank before using their
services.
2. Delivery order can be issued only after clearance of payment and closure of
loan.

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