NIC Asia Bank Invites Sealed Bids for Collateral Sale as it Initiates Auction Process to Recover Defaulted Loans
2nd June 2026, Kathmandu
NIC Asia Bank Limited has issued a 15-day public notice inviting sealed bids for the auction of mortgaged movable and immovable properties belonging to loan defaulters.
NIC Asia Sealed Bids
The decision comes after borrowers failed to repay outstanding loan amounts despite repeated reminders and prior settlement notices.
According to the bank, multiple attempts were made to recover dues through verbal and written communications, including a previous 35-day repayment notice. However, since the borrowers did not clear their liabilities, the bank has now proceeded with formal auction proceedings to recover the outstanding amounts through collateral liquidation.
Auction of Mortgaged Properties Begins
As part of the recovery process, NIC Asia Bank Limited will auction properties pledged as security against defaulted loans. These include both movable and immovable assets provided by borrowers at the time of loan approval.
The bank has invited individuals, private firms, companies, and institutions to participate in the bidding process by submitting sealed bid applications.
Interested parties may purchase the assets in their existing condition, subject to the terms and conditions outlined in the auction bid documents and applicable laws.
Submission Details and Deadline
The bank has requested interested bidders to submit their applications within 15 days of the notice publication.
The submission location is at the Central Office under the Credit Recovery Department. The physical address is located at Radha Bhawan, Tripureshwor, Kathmandu, and the required submission method is a sealed bid application.
All bids must comply with the guidelines specified by the bank to be considered valid for evaluation.
Legal Basis for Loan Recovery and Auction
The auction process is being conducted under Nepals banking and financial legal framework. If the auction does not fully recover the outstanding loan amounts, the bank reserves the right to pursue additional recovery measures.
According to the notice, remaining dues may be recovered from the main borrowers, loan guarantors, or any additional movable and immovable assets under their ownership.
This process will follow provisions outlined in the Bank and Financial Institutions Act, 2073, alongside the Debt Recovery Act, 2058. It will also adhere to other prevailing financial regulations in Nepal. These legal frameworks empower banks to take necessary actions to recover defaulted loans and protect financial system stability.
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Why Banks Take Auction Action
Loan default auctions are typically initiated when borrowers fail to meet repayment obligations despite repeated follow-ups. Financial institutions rely on collateral-backed lending systems to reduce risk, and when repayment fails, asset liquidation becomes a necessary recovery mechanism.
Key reasons for initiating an auction include the continuous non-payment of loans and a failure to respond to settlement notices. It also happens after the exhaustion of negotiation and restructuring options, or due to a legal requirement to recover public funds.
Such actions also help maintain financial discipline within the banking sector.
Impact on Borrowers and Guarantors
Borrowers and guarantors involved in default cases may face significant financial and legal consequences. Once auction proceedings begin, pledged properties may be sold to third parties, while outstanding loan balances remain fully enforceable.
Furthermore, guarantors may be held liable for unpaid amounts, and additional recovery actions may be initiated at any point.
The bank has urged all concerned parties to take the notice seriously and comply with repayment or legal procedures where applicable.
Opportunities for Buyers
While the notice primarily addresses loan recovery, it also presents an opportunity for potential buyers. Auctioned properties may be purchased by real estate investors, businesses seeking commercial assets, and individuals looking for property investment opportunities.
However, buyers are required to carefully review bid conditions and ensure compliance with all legal and procedural requirements before participating.
Conclusion
NIC Asia Bank Limited has formally launched a 15-day auction process to sell mortgaged properties of loan defaulters in order to recover unpaid dues. The decision follows repeated repayment failures and prior settlement notices issued to borrowers.
Conducted under Nepals banking and debt recovery laws, the auction allows interested individuals and institutions to submit sealed bids for pledged assets. If recovery through auction remains incomplete, further legal recovery actions will be pursued against borrowers and guarantors.
The notice highlights the importance of timely loan repayment and reinforces the banking sectors commitment to maintaining financial discipline and protecting institutional stability.
For More: NIC Asia Sealed Bids
