Loan Default Auction Notice: Lumbini Bikas Bank Initiates 21-Day Sealed Bid Sale
2nd June 2026, Kathmandu
Lumbini Bikas Bank Limited has issued an urgent 21-day public notice calling for sealed bids to auction mortgaged properties of multiple loan defaulters.
Loan Default Auction Notice
The notice outlines the bank’s decision to recover outstanding loans through the sale of pledged assets after repeated repayment failures.
The borrowers involved had failed to settle their principal, interest, penalty interest, and other charges despite repeated reminders and public notices issued earlier by the bank.
Auction Process for Mortgaged Properties Begins
As part of the recovery process, Lumbini Bikas Bank Limited will sell mortgaged movable and immovable properties pledged against various loans.
Interested individuals, firms, companies, and institutions are invited to participate in the sealed bidding process. The properties will be sold in their existing condition under the terms and conditions specified in the bid documents and applicable laws.
The bank has clearly stated that all bidders must submit properly filled sealed bids within the designated timeframe.
Submission Timeline and Process
The auction notice specifies strict deadlines for participation.
The bid submission deadline is fixed within 21 days of the notice publication. The formal bid opening date will take place on the 22nd day, or the next working day if a holiday occurs. The designated submission location is at the respective branch offices of Lumbini Bikas Bank Limited where the loans were originally issued or managed.
Interested buyers must obtain the official bid form by paying a non-refundable fee from the banks branch offices.
Legal Framework Governing the Auction
The auction process is being carried out under the authority granted by the Bank and Financial Institutions Act, 2073 and other applicable recovery laws in Nepal.
According to the notice, if the auction proceeds fail to recover the full outstanding dues, the bank reserves the right to pursue additional recovery measures against the main borrowers, property owners, and loan guarantors. These may include legal proceedings and recovery from other personal assets as permitted by law.
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Key Details of the Loan Defaulters and Collateral
The notice includes multiple borrowers and guarantors whose properties have been placed under auction. The pledged assets include residential land and houses, plots in Kathmandu, Bhaktapur, Sarlahi, Dolakha, Morang, and other regional locations.
These are legally registered immovable properties with associated structures. Each property will be sold to the highest bidder subject to approval by the bank and compliance with auction rules.
Borrower Liability and Blacklisting Risk
Lumbini Bikas Bank Limited has also warned that borrowers, proprietors, directors, and guarantors involved in default cases may be listed in credit blacklist records. They can also be subjected to further legal recovery action and held jointly liable for outstanding dues.
Even after the collateral sale, if the loan amount is not fully recovered, the remaining dues will still be legally enforceable by the financial institution.
Rights and Responsibilities of Buyers
Prospective bidders are advised to carefully review auction conditions before submitting bids.
Properties are sold strictly in an as is, where is condition. No claims or objections will be entertained regarding valuation or sale price after submission. Full payment must be made within the stipulated period after bid approval, and the bank reserves the right to accept or reject any bid without assigning reasons.
These conditions ensure procedural transparency while protecting the banks financial interests.
Importance of Loan Recovery Auctions
Loan recovery auctions are a critical mechanism for maintaining financial discipline in the banking sector. Institutions like Lumbini Bikas Bank Limited rely on collateral-backed lending systems, where pledged assets serve as security in case of default.
Such auctions help recover non-performing loans and maintain liquidity in the banking system. They also enforce repayment discipline among borrowers and protect depositors funds.
Conclusion
Lumbini Bikas Bank Limited has issued a 21-day sealed bid auction notice to recover dues from multiple loan defaulters by selling mortgaged properties across various locations in Nepal. The process follows strict legal guidelines under national banking laws and allows interested buyers to participate through sealed bids.
The notice highlights the banks firm stance on loan recovery while reinforcing the importance of financial responsibility among borrowers and guarantors.
For More: Loan Default Auction Notice
