Ref. – UPAA- 4 / 1-114/01-2016 Date-05.01.2016 To, The Governor Reserve Bank of India Central Office Building 19th Floor, Sahid Bhagat Singh Road, Mumbai- 400001 Sir, Sub: Role of valuation of immovable properties in bank’s N.P.A. We all are well aware that N.P.A.’s of banks have increase to a critical level in recent past which is linked to the valuation of the properties mortgaged by banks and hence to the valuer. C.B.D.T. has prescribed the qualifications/competence of the valuers under section 34 A, B (Rule 8A) of the wealth tax act 1957 and their remuneration under rule 8(C). Again C.B.D.T. has also fixed the remuneration to be charged by the valuers and has subsequently revised the provisions of rule 8(C) through Govt. Of India notification no.15/2009 dated 30.01.2009. Copy of both mentioned above are enclosed herewith for your ready reference. Now the problem has emerged with the trend of specifying the remunerations of the valuers especially by private banks making profit out of valuers fees which is now also being followed by almost all the nationalized banks. Each bank has different parameters pertaining to the competence and remuneration of the valuers as low as @ RS. 850.00 in HDFC bank and @ RS.1000.00 in ICICI bank (which includes cost of reports, photographs, service tax and site visit ) for any magnitude of the property. Similarly nationalized banks have fixed 50% fees for NPA properties while such valuations need more attention and skill. In such circumstances the valuers are also either compromising on quality of work or compensating their fees in some other ways.In both conditions we, as association, find it difficult to deal with the matter/complaints as the quality of work is directly related to the remuneration and are complementary to each other. As a result valuer of high integrity and competence are walking away from the banking industry as it is resulting to the identity of the bank’s valuer becoming a low profile professional. The situation is ultimately causing damage to the banking system as well as to competence and integrity of valuers. Hence I would request you to interfere in the matter and instruct banks/financial institutions to follow the competence and remunerations as fixed by C.B.D.T. The banks may form the panels of three categories ( A, B and C ) for different magnitude of property value. The parameters for each category of valuers may be fixed. RBI may also have a mechanism for checks and balances on these two counts. It will help the banks to reduce NPA’s and get a reasonable property valuation done by a well qualified professional. We will appreciate if the matter is considered on merit as it will also motivate us to deal the matters of complaint /professional ethics in this regard.

Thanking You. Yours Sincerely. (R. K. DWIVEDI) President UPAA Encl.:1. Prescribed qualification/competence of valuer in Wealth Tax Act 1957. 1. Revised fee structure of valuer by CBDT. 2. Copies of letters containing terms & conditions of different banks including fee structure.