Calcutta, April 6: Amid growing scepticism that banks and financial institutions could be saddled with the assets seized under the Securitisation Act due to a lack of interest among domestic buyers, there appears to be a ray of hope emerging from beyond the borders.
While lenders have begun seizure operations on defaulters who are unwilling to settle their dues despite the notices served to them under the new law, bankers have started receiving queries from foreign companies on how assets in the possession of lenders can be bought.
“We have already received a few queries from foreign parties through their agents on the legal position about taking over the assets, mainly factories, that the lenders might take possession of,” a senior official of State Bank of India said.
Bank of Baroda and Bank of India has also received such queries from international companies. However, all three banks refused to name the firms or the nature of queries.
Foreign companies are interested since they can buy assets at a much lower value from lenders desperate to offload them at the earliest because of the problems associated with running or maintaining such assets during the period of seizure, the SBI official said.
The banks have decided to convene a meeting with the Reserve Bank so as to facilitate the entry of foreign buyers into the Indian market.
The bankers feel the modalities should be in place before initiating talks with the foreign companies. “Those interested in the businesses being taken over by banks feel they can be acquired at a significantly lower price compared with the cost of setting up such units from scratch. Moreover, banks would also be eager to dispose of the seized assets since maintaining them would prove to be an arduous task,” bankers said.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Bill allows banks to attach and dispose off the properties of defaulters who refuse to pay up during the 60-day notice period.
Despite the passage of the Bill in both Houses of Parliament, there has been a sense of scepticism among a section of lenders who feel banks and financial institutions should not go ahead with the seizures without ascertaining the possibility of finding buyers for the same.