Ten points to be remembered for valuation for collateral securities

KNOWLEDGE BANK

LET KNOWLEDGE SPREAD

Message from B K Aruna 08.09.2023

Ten points to be remembered by a panel valuer when he wants to do valuation for collateral securities :

1. Value varies with purpose. The purpose of valuation for collateral security is to certify mainly the present market value. Insist for an engagement letter from the bank.

2. Perusing the relevant title deeds and the latest legal opinion are your prime duties.

3. It is the duty of the borrower (owner) to identify his property correctly and it is your responsibility to verify the identification of the said property with reference to the documents given to you for perusal.

4. If you are not able to identify the property correctly in spite of your serious efforts, do not take up such risky assignment.

5. The properties can be inspected by your staff and the reports can be prepared by your sub-ordinates. There is nothing wrong in it. But, before signing, it is your duty to inspect the property physically if you do not wish to have any problems at any future date. And that is the expectation from the bank also.

6. Valuation report is an ambassador of the valuer. Let your report be detailed and an informative one giving all the vital informations. Along with the report, enclose the engagement letter, the line sketch, key plan, co-ordinates and also the photograph of the property.

7. Never certify any market value for non-marketable properties.

8. Advise the bank about the number of title deeds involved in the subject property along with the registration numbers of the deeds, marketability and enforceability aspects.

9. While doing valuation of leasehold properties, never proceed with the valuation without perusing the lease deed and the conditions stipulated in it. Remember that the lease should have been registered.

10. If the borrower becomes a defaulter and if his account becomes NPA, value is to be certified by a SARFAESI valuer and at that time, he should not be in a position to find any discrepancies in your report. You should know how to defend.