Monday, June 15, 2009

RBI NORMS FOR VALUATION OF PROPERTIES BY BANKS

Policy for valuation of properties

  • Banks should have a Board approved policy in place for valuation of properties including collateral's accepted for their exposures.
  • The valuation should be done by professionally qualified independent valuers i.e. the valuer should not have a direct or indirect interest.
  • The banks should obtain minimum two Independent Valuation reports for properties valued at Rs.50 crore or above.
Revaluation of bank's own properties


As the revaluation should reflect the change in the fair value of the fixed asset, the frequency of
revaluation should be determined based on the observed volatility in the prices of the assets in 
the past.

Policy for Empanelment of Independent valuers
  • Banks should have a procedure for empanelment of professional valuers and maintain a register of 'approved list of valuers'.
  • Banks may prescribe a minimum qualification for empanelment of valuers. Different qualifications may be prescribed for different classes of assets (e.g. land and building, plant and machinery, agricultural land, etc.). While prescribing the qualifications, banks may take into consideration the qualifications prescribed under Section 34AB (Rule 8A) of  the Wealth Tax Act, 1957.

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