BANK MANDATES DIGITALLY SIGNED REPORTS OF VALUERS

Digital Transformation in Legal and Valuation Practices

Bank Mandates Digitally Signed Reports from Panel Advocates and Valuers

By Er. Sundeep Bansal | Special to CEV TECHNO NEWS

In a decisive step toward improving governance, document integrity, and legal compliance, a leading public sector bank has issued new guidelines mandating that Legal Scrutiny Reports (LSRs) and Valuation Reports from empanelled Advocates and Valuers—collectively known as Third Party Entities (TPEs)—must be digitally signed for all assignments sanctioned from July 1, 2025, onwards.

This reform reflects a growing trend across Indian financial institutions to transition toward digitally secure documentation systems, driven by statutory obligations and the rising need for transparency and traceability in credit and mortgage-related operations.

Background: Legal and Valuation Reports as Cornerstones of Lending

In the Indian banking and finance ecosystem, valuation and legal scrutiny are critical steps in the appraisal and risk assessment of asset-backed loans. As per the Bank’s existing guidelines:

Valuation Reports are mandatory when fixed assets such as land, buildings, or plant & machinery are offered as primary or collateral security by the borrower.
Legal Scrutiny Reports (LSRs) are essential to validate title clarity, marketability, encumbrance status, and ensure lawful enforceability of mortgage documents.

These reports are sourced from the bank’s empanelled Third Party Entities (TPEs)—a select list of approved advocates and valuers who are expected to operate with professional independence, expertise, and ethical conduct.

The detailed protocols for obtaining these reports are set out in:

HO Circular I C/211/2025 dated 27.03.2025 (for Valuation Reports), and
Manual of Instructions on Documentation by the Recovery, Legal & Fraud Prevention Wing (for LSRs), both of which are binding on branches and zonal offices.

The New Mandate: Digital Signatures Now Mandatory

In a communication issued by the Chief General Manager, Canara Bank has introduced the following key guideline:

“Effective July 1, 2025, all empanelled valuers and empanelled advocates shall mandatorily submit digitally signed reports for all assignments assigned by the Bank.”

All Circle Offices have been instructed to inform their panels accordingly, and Branches/Offices have been directed to ensure strict compliance, rejecting any report that lacks a valid digital signature.

Understanding Digital Signatures: Legal Backing Under Indian Law

Digital signatures are governed by the Information Technology Act, 2000, which gives them legal recognition equivalent to physical signatures (Section 5). To be valid, the digital signature must be:

Issued through a licensed Certifying Authority (CA),
Backed by a Digital Signature Certificate (DSC),
Unique to the signatory and non-repudiable,
Capable of detecting any alteration to the signed document.

In effect, a digitally signed report ensures that:

The identity of the signatory (valuer/advocate) is authenticated.
The document is tamper-proof.
The report holds evidentiary value in a court of law, as per Sections 3, 4, and 65B of the Indian Evidence Act.

Why This Matters for Valuation Practice Aspirants and Legal Professionals

For young and aspiring Registered Valuers, legal advisors, and professionals aiming to build a career in credit-linked financial services, this development marks a pivotal shift:

1. Legal Compliance is Now Non-Negotiable

Working with banks now requires a robust understanding of digital governance, compliance with RBI and IT laws, and familiarity with digital signature workflows.

2. Professional Certification Alone is Not Enough

Technical knowledge in valuation or property law must be supplemented with IT literacy. Professionals are now expected to:

Obtain and maintain a Digital Signature Certificate (DSC),
Understand how to sign PDFs or reports using digital tokens/software,
Securely transmit and store signed reports in digital environments.

3. Enhanced Accountability and Transparency

With digital signatures, reports are time-stamped and identity-linked. This not only deters plagiarism or tampering but also ensures accountability of the professional behind each report.

4. Legal & Professional Recognition

Digitally signed reports enhance the credibility of a valuer’s or advocate’s opinion. They are harder to dispute, strengthening the professional’s standing in judicial or quasi-judicial forums.

Banking Sector Implications: Governance Meets Technology

This move is part of a larger push in Indian banking toward:

Digital documentation and paperless workflows.
Fraud prevention through audit trails.
Faster TATs (Turnaround Times) through electronic processing.
Integration with Enterprise Document Management Systems (EDMS) and Core Banking Systems.

Several public and private sector banks are now revising their procurement and compliance frameworks to mandate digitally authenticated reports from their TPEs. Over time, this could become a sector-wide norm.

A Call to Embrace Change

The digitization of legal and valuation reporting isn’t just a regulatory upgrade—it’s a paradigm shift in how banking documentation is created, verified, and trusted. For professionals, particularly those entering valuation and legal services in the financial domain, adaptability to digital compliance will be a key differentiator.

As India pushes toward digital trust frameworks, blockchain-based registries, and AI-assisted due diligence tools, today’s valuation and legal professionals must evolve—not only in their core domain knowledge, but also in their technological readiness and ethical commitment.

This is not just a procedural change. It is a milestone in the professionalization and modernization of the credit ecosystem—where integrity is not just expected, but digitally enforced.