Banks won’t auction stressed loans covertly

Under a new framework that high-street banks agreed recently, lenders will have to ensure that the decision to auction loans is notified to all key players in the market.

This will end the practice of pushing through a sale by putting out the auction advertisement in an innocuous newspaper while keeping many potential bidders in the dark.

“This is a code of conduct to enable wider participation in loan sale deals and bring more transparency. Also, due to changes in the market dynamics, the document mentions all the information about a loan that banks must provide,” said an industry person.