Section 9 of BRA : Section 9: Disposal Of Non-Banking Assets

Explanation using Example

Imagine a scenario where ABC Bank, a banking company, forecloses on a commercial property after the borrower defaults on a loan. According to Section 9 of The Banking Regulation Act, 1949, ABC Bank is required to sell or dispose of this foreclosed property within seven years of acquiring it because it is not needed for the bank's own use, such as for a branch or office.

However, if ABC Bank struggles to find a buyer, it can trade or deal in the property to facilitate its sale within the seven-year timeframe. If the property still hasn't been sold and the bank believes it is in the depositors' best interest to hold onto the property longer, ABC Bank can apply to the Reserve Bank of India (RBI) for an extension. The RBI has the authority to grant an extension of up to five additional years, making the total potential time for holding the property twelve years from the date of acquisition.