Banks anticipating difficulties in adhering to Reserve Bank of India's (RBI) guidelines on valuation of properties want a model policy document to be drawn up at the IBA-level, which could serve as a guidance note. | |
| In January, the regulator had asked banks to put in place a system for realistic valuation of fixed assets and also to prepare a panel of valuers for the same. It had also advised banks to have a board-approved policy in place for valuating properties, including collaterals for loans. |
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| Banks said that at present there is no institutional mechanism to take penal action against valuers in case of professional misconduct, which could include giving a false or incorrect valuation report, and for fixing responsibility for the loss caused to the bank due to wrong valuation of the property. |
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| There are a few private bodies registered as institutional valuers but most of them are not registered under the various state laws. |
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| The government has also not laid down any specific qualification for individuals to become valuers. However, banks consider persons as valuers if they meet the qualifications under the Wealth Tax Act 1957. |
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| Also, there is no qualification prescribed for expertise in valuation of specific types of assets. Individuals with an engineering degree usually take up the work of valuation of all types of properties including land and building, plant and machinery and agricultural land, which are given as collateral for loans. |
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