Auction Research Editorial Team · Pillar guide
Auction Process · 12 min read · Published 2026-05-04 · Updated 2026-05-04
Definitive reference on EMD in Indian bank auctions — how it is calculated, how to pay it, when it is forfeited, when it is refunded, and the documentation that makes the difference between a smooth refund and a 6-month chase.
What EMD is and why it exists
EMD (Earnest Money Deposit) is a refundable security deposit paid by every bidder before participating in a bank auction. Its purpose is to demonstrate bidder seriousness and protect the seller from frivolous bidders who would back out after winning.
EMD is set as a percentage of the reserve price — typically 10% for SARFAESI and 10-25% for DRT/NCLT auctions. The exact amount, payment account, and deadline are specified in every sale notice.
How EMD is calculated
- Standard SARFAESI auction — 10% of reserve price.
- DRT auction — 10% of reserve price (Recovery Officer can adjust).
- NCLT / IBC liquidation — often 5-10%, sometimes higher for premium assets.
- Always check the specific sale notice — banks can specify a flat amount instead of percentage.
How to pay EMD correctly
Most EMD payments today are via NEFT/RTGS to a designated bank account specified in the sale notice. Some auctions still accept demand drafts; cash is essentially never accepted.
- Pay strictly via the channel specified in the notice — wrong channel = disqualification.
- Include any specified reference number (often bidder ID + property code).
- Save the UTR / payment confirmation as PDF (not just screenshot).
- Pay at least 24-48 hours before the deadline to absorb any banking delays.
- Keep your bank account holder name matching your bidder registration name exactly.
EMD refund scenarios
Knowing exactly when refund happens (and when it does not) lets you plan your cash flow correctly.
- Unsuccessful bidder, sale completed — refunded within 7-15 working days typically.
- Auction cancelled before sale — refunded within 7-15 working days.
- Winner — EMD adjusted against the 25% post-win payment.
- You withdraw before the auction — refunded after the auction (sometimes the full deadline period must elapse).
- Sale not confirmed by RO/bank for non-bidder reasons — refunded after RO/bank order.
When EMD is forfeited
Forfeiture is the worst-case scenario. Avoid these triggers.
- Winner fails to pay 25% within the specified window (1-2 days typically).
- Winner fails to pay the balance within the full payment window (15-30 days).
- Winner withdraws after winning the bid.
- Bidder provides false KYC documents.
- Bidder violates auction terms during the bidding process.
EMD documentation that prevents refund delays
EMD refund is the one auction step where bureaucracy bites hardest. Get the documentation right at the time of payment to avoid weeks of follow-up.
- Bidder registration confirmation (with bidder ID).
- EMD payment proof — UTR, bank acknowledgment, transaction date.
- KYC pack matching bidder registration name exactly.
- Bank account details for refund — verify the same name as bidder.
- Auction non-success communication from the bank (auto-generated by most portals).
- Follow-up email to the bank’s SARFAESI cell within 7 days if refund is delayed.
Common EMD mistakes (and how to avoid them)
- Paying from an account in a different name than bidder registration.
- Late payment because of cross-bank NEFT cutoff.
- Wrong reference number — payment goes to suspense account.
- Missing the deadline by even minutes (banks rarely make exceptions).
- Not saving payment proof as PDF (screenshots get lost).
- Assuming refund will be automatic — always follow up at day 7-10.
