BANKS TO S T R E A M L I N E P R O P E R T Y VALUATION
The Reserve Bank of India (RBI) has asked banks to have board-approved policies for valuation of properties, as its correctness has implications for computation of capital adequacy ratio. As per RBI it has been observed that different banks follow different policies for valuation of properties and appointment of valuers for the purpose. Valuation of properties, including collaterals accepted for the exposures and the valuation, should be done by professionally qualified independent valuers with no direct or indirect interest. Banks have been asked to obtain a minimum of two independent valuation reports for properties valued at Rs. 50 crore or above. The policy should also cover the disclosure required to be made in the ‘Notes on Account’ regarding the details of revaluation such as the original cost of the fixed assets subject to revaluation and accounting treatment for appreciation / depreciation, etc.