Remember notices/announcements from banks, which generally appears on internal pages of newspapers mentioning auctions of Non Performing Assets (NPAs). NPA is primarily a classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower fails to pay interest or principal payments for 3 months (90 days), then the loan becomes a non-performing asset.
While newspapers only feature auction or sale announcement/notification with limited reach (depending on circulations), the Ahmedabad based NPAsource – an online marketplace for NPAs, aspires to make the entire process transparent and smooth for both banks as well as individual or parties looking to bid for NPAs.
The platform offers end to end services right from announcement to resolution, if both (banks and bidder) the parties agree to it and features more details available for the investor/probable buyer than an announcement that only has location and property details.
Unlike newspapers, notices on NPAsource stays till the property is actually get auctioned and can be viewed worldwide. To understand more about NPAsource, NextBigWhat spoke to Devendra Jain, Managing Director of NPAsource. Edited excerpts:
NextBigWhat: What’s the concept behind NPASource?
Devendra Jain: For the Banking sector, the increasing level of Non Performing Assets ( NPAs) is becoming the biggest concern and we are well aware of its causes and effects on the Indian economy. Rising NPAs are a major cause of concern for not only banks in particular, but also for economy overall.
NPAsource was launched specifically keeping in mind the fact that there is as yet no online portal that not only helps banks to resolve their NPAs, but also ensure that investors pay the right price. Also, as an online platform that brings investors/buyers directly in contact with sellers, it does not have any intermediary thereby realizing maximum value to the seller.
Opportunities are immense as NPAs are constantly rising and banks are under pressure to clear their balance sheet of bad assets. Since, any institution can offer such services provided they have required expertise of technology, knowhow and technical competence, the market size would be equivalent to outstanding NPAs.
NextBigWhat: Traditionally NPAs auction/sale announcement from banks happen via mainstream newspapers. How does NPAsource offer a better value proposition than mainstream dailies?
Devendra Jain: What appears in newspapers is only auction or sale announcement/notification. NPAsource offers an entire range of services from announcement to resolution, if both the parties agree to it. Also, NPAsource.com has more details available for the investor/probable buyer than an announcement that only has location and property details.
Moreover in the newspaper the life of auction notice is just a single day and also in news paper the coverage is limited according the circulation. Whereas on NPAsource.com the notice stays till the property is actually auctioned and can be viewed worldwide.
Posting property auction notices online also have a cost advantage over the print medium.
Our technical competence helps us in thorough and successful resolution of NPAs. The technical details about the property would help the investor in gauging the true value of the property, which will in turn ensure higher realization for the seller.
NextBigWhat: How does the platform works for banks and investors? Also, what has been the traction in terms of auctions, traffic etc.
Devendra Jain: All nationalized, private, foreign and co-operative banks, financial institutions, Asset Reconstruction Companies, NBFCs, Debt Recovery Tribunals, Official Liquidators, BIFR and anyone who issues the auction/possession or sale notices for the recovery of their dues can participate with NPAsource.
Few banks have already started posting their notices on our website. Visitors’ entry is free. But, if anyone wants to participate in the auction or want more details, they need to register with us. Facilitators, investors, real estate consultants, brokers etc will require subscription.
In terms of traffic, we are seeing seamless transition without any roadblock and higher growth in terms of genuine investors/buyers and and received encouraging confidence from facilitators and banks.
NextBigWhat: As of now, how many banks or financial institutions have signed up with NPAsource?
Devendra Jain: Banks like SBI, Bank of India, IDBI Bank, Indian Overseas Bank, Punjab National Bank and Central Bank have started listing their NPAs with us. Apart from banks, NABARD had recently joined us. The Gujarat Urban Co-operative Banks Federation (GUCBF), the apex cooperative body for the 244 urban cooperative banks in the state, has recommended all its member banks to utilise the facilities offered by NPAsource.
We are in the process of signing up with other recognised banks for their notices and also financial institutions.
NextBigWhat: What are the source of revenue for NPAsource? Monetization model?
Devendra Jain: There are three major revenue models for the platform beside member registration fee (for premium services) for investors and advertising:
– Paid listing of facilitators (To assist investors and banks to resolve NPAs) – Like CAs, CSs, Advocates and other professional services etc.
– Resolution Fees from the Banks/Investors on the NPA properties on case to case basis, if it is resolved through portal.
– Get paid for the Bank notices published on the portal
NextBigWhat: Are you funded or looking for funds?
Devendra Jain: Our initial investment of around Rs. 3.5 crore, which has come from founder members. We are expanding manifold with full aggression all over the nation and overseas. In future, our venture would require a supporting funding of about Rs.50 million for the organisation to reach the position as per its specific agenda.