The law and the process
How a SARFAESI bank auction works, from the bank's first notice to the sale certificate.
The Act, the Rules and the clocks — the demand and possession notices, the sale notice, the e-auction day, what the 25% and fifteen-day deadlines mean, when a borrower can still act, and how symbolic possession becomes physical. Mechanism only, with the section cited.
The process at a glance
A SARFAESI sale follows a fixed order. Each step has a section of the Act or a rule behind it, and a buyer's position depends on each one having been done correctly.
- 1
Demand notice
The borrower has 60 days to clear the dues.
SARFAESI Act s.13(2)
- 2
Possession notice
The bank's Authorised Officer takes possession; often nobody moves out yet — this is symbolic possession.
s.13(4); Rule 8(1)–(2)
- 3
Valuation and reserve price
An approved valuer values the property; the bank fixes the reserve price, the floor for that auction.
Rule 8(5)
- 4
Sale notice
At least 30 days' notice to the borrower and in two newspapers, with the terms on the bank's website.
Rules 8(6)–(7), 9(1)
- 5
E-auction
Bidders who have paid the EMD bid online from the reserve price upwards.
Rule 8(5)(c)
- 6
25% deposit
Including the EMD — the same day or by the next working day.
Rule 9(3)
- 7
Balance
By the fifteenth day of confirmation of sale, or up to three months if agreed in writing.
Rule 9(4)
- 8
Sale certificate
Issued on full payment. Physical possession of an occupied property may need a Section 14 order the bank applies for.
Rule 9(6); s.14
Miss the balance deadline and the deposit is forfeited (Rule 9(5)). The borrower's right to redeem ends once a valid sale notice is published (s.13(8)).
Guides
SARFAESI in One Page: From the Bank’s First Notice to the Sale Certificate
How a SARFAESI bank auction works, step by step: the demand notice, possession, the sale notice, the e-auction, Rule 9 deadlines and the sale certificate.
Read the guideHow to Read a SARFAESI Sale Notice, Line by Line
What each line of a bank’s SARFAESI sale notice means under Rule 8 — property, encumbrances, reserve price, EMD, portal — and what to check before paying EMD.
Read the guide“As Is Where Is, As Is What Is”: What a Bank’s Sale Notice Does and Does Not Promise
What “as is where is” means in a SARFAESI sale: the title you receive, the encumbrances the bank must disclose, and the dues that can follow the property.
Read the guideThe Borrower’s Right to Redeem, and What a Challenge Can Still Do
When the right to redeem ends under SARFAESI s.13(8), what a DRT challenge under s.17 can still do, and what stays, appeals and insolvency mean for a buyer.
Read the guideTenants in a Bank-Auction Property: Who Can Stay, and for How Long
Whether a tenant can stay after a SARFAESI bank auction: lease before or after the mortgage, registered or oral, the s.13(2) notice, and where the DRT decides.
Read the guideBank Auction, DRT Recovery Auction or IBC Liquidation Auction: How They Differ
Three kinds of sale get called a bank auction: SARFAESI, DRT recovery-officer and IBC liquidation. Who sells, the payment clocks, challenges and what to check.
Read the guide
Guide to Buying Bank Auction Properties in Bengaluru
How a bank auction works in Bengaluru: the records to read, where auctions are published, the payment clocks after you win and what to check before EMD.
Read the guide
Understanding the SARFAESI Act, 2002: Objectives, Features, and Auction Rules
Detailed explanation of the SARFAESI Act, its objectives, key features, and auction rules for property recovery.
Read the guide
Physical vs Symbolic Possession in Bank Auctions: What Every Buyer Must Know
What symbolic and physical possession mean in a SARFAESI sale, how an occupied property is handed over under Section 14, and what a buyer can do.
Read the guideAlso on this site
In preparation
Guides being written for this shelf. Each is checked against the law it cites before it is published.
- Symbolic vs physical possession: the legal meaning
- Registering as a bidder: KYC, the e-wallet and the EMD
- Confirmation of sale, and when the fifteen days start
- Valuation and the reserve price: who sets it and what it is not
- When an insolvency case stops a bank auction
- Which lenders can sell under SARFAESI