Indian Banks Harassing Valuers
There are around 10,000 Govt. Reg. throughout India of different categories. These Govt. Reg. Valuers are registered under Wealth Tax Act 34 AB 1957. Valuers are required by Banks, Govt. Dept. including Income Tax, High Court, DRT & Housing finance companies for valuation of different kinds of assets for different purposes like Housing, Mortgage, Education, Auto, Cash Credit, Project, etc.
Govt. of India Ministry of Finance has prescribed fees structure write from 1957 which was roughly Rs. 125/- per lac plus actual expenses & recently it has been reduced by 60%, but still major Nationalised Banks, Private, Co-operative & Foreign Banks don’t pay as per Govt. Fee Structure. They are miss using the said Act as per there convenience, i.e. whichever words, sentences are suitable for them, they are picking and implementing. For example, In the said Act it has been written “Fees should not be more than the following table”, but that doesn’t mean that banks should wrongly interpret the act. To the best of my knowledge every individual is bound to obey all the rules, regulations & acts enacted by the state & central govt., likewise all the banks has to follow & implement the act in Toto.
Way back in the year 2002 Govt. of India came up with an act called as Competition Commission of India 2002, which says anything which would wipe out competition is not allowed, i.e. if a manufacturing cost of a soap is Rs. 10/- & if a company decides to sell the soap at Rs. 5/- is not allowed because this would violate the Competition Act. Some of the Insurance Companies are already under the scanner of Competition Commissioner & have already being asked to pay fine for violation of this Act. Many Banks are taking Indemnity Bond/ asking for signing one sided MOU and fees paid to the valuer are hardly Rs. 750/- to 1500/- for housing loans .For other loans some of the banks are paying as per wealth tax act fees structure, but having a upper limit of fees varying from Rs. 2,000/- to 1,00,000/- against the govt. fee structure which doesn’t have any upper fee limit/cap. Means even though if there are say 30-35 valuers on the bank’s panel in that particular region, those valuers are preferred those who sign the indemnity bond/MOU, i.e. bank is first violating their own policy by adopting illegal dual policy & secondly violating Govt. India Fees structure & thirdly violating Competition Act by preferring hardly 4-5 valuers who sign Indemnity bond/MOU out of 30-35 on panel. By this banks are grossly exploiting valuers throughout India for many years & poor valuer has to accept because of their livelihood. And top of that if any valuer fights for the above cause, he is either not given future business or being delisted from the bank’s final without adopting any valid reason.
Recently Indian Bank Association came up with an Handbook on Real Estate Valuation for Banks & HFls, which has prescribed following guidelines:-
Govt. of India Ministry of Finance has prescribed fees structure write from 1957 which was roughly Rs. 125/- per lac plus actual expenses & recently it has been reduced by 60%, but still major Nationalised Banks, Private, Co-operative & Foreign Banks don’t pay as per Govt. Fee Structure. They are miss using the said Act as per there convenience, i.e. whichever words, sentences are suitable for them, they are picking and implementing. For example, In the said Act it has been written “Fees should not be more than the following table”, but that doesn’t mean that banks should wrongly interpret the act. To the best of my knowledge every individual is bound to obey all the rules, regulations & acts enacted by the state & central govt., likewise all the banks has to follow & implement the act in Toto.
Way back in the year 2002 Govt. of India came up with an act called as Competition Commission of India 2002, which says anything which would wipe out competition is not allowed, i.e. if a manufacturing cost of a soap is Rs. 10/- & if a company decides to sell the soap at Rs. 5/- is not allowed because this would violate the Competition Act. Some of the Insurance Companies are already under the scanner of Competition Commissioner & have already being asked to pay fine for violation of this Act. Many Banks are taking Indemnity Bond/ asking for signing one sided MOU and fees paid to the valuer are hardly Rs. 750/- to 1500/- for housing loans .For other loans some of the banks are paying as per wealth tax act fees structure, but having a upper limit of fees varying from Rs. 2,000/- to 1,00,000/- against the govt. fee structure which doesn’t have any upper fee limit/cap. Means even though if there are say 30-35 valuers on the bank’s panel in that particular region, those valuers are preferred those who sign the indemnity bond/MOU, i.e. bank is first violating their own policy by adopting illegal dual policy & secondly violating Govt. India Fees structure & thirdly violating Competition Act by preferring hardly 4-5 valuers who sign Indemnity bond/MOU out of 30-35 on panel. By this banks are grossly exploiting valuers throughout India for many years & poor valuer has to accept because of their livelihood. And top of that if any valuer fights for the above cause, he is either not given future business or being delisted from the bank’s final without adopting any valid reason.
Recently Indian Bank Association came up with an Handbook on Real Estate Valuation for Banks & HFls, which has prescribed following guidelines:-
- Minimum Age 25 years and no upper age limit which certain nationalised & co-operative banks do have.
- Minimum Fees for A Category Valuer is Rs. 2,500/-, which again major banks doesn’t pay, even leading Nationalised Banks like SBI, ICICI , Bank of Baroda, Bank Of India, Syndicate Bank, Indian overseas Bank, Indian Bank, HDFC Bank, Central Bank , Union Bank, Canara Bank , LIC Housing , GIC Housing finance DHFL, City bank and other Banks. Saraswat bank has fixed amount Rs2500 for housing loan.
For fees related issues banks gives an excuse that home loan is a priority sector for which you have to give concession .The valuer fraternity replied that now a days in all metro to smallest village a 1BHK flat price varies from 20 lacs to crores of rupees and when borrower can pay stamp duty, registration charges, VAT, Service Tax which amounts to 10.09% on the total consideration plus if the borrower has taken help from estate agent then he will be charge 1-2% on the consideration. The matter doesn't end here if he hire a service of a loan agent he charges from 0.5 to 2-3% depends on borrowers need.
Conclusion: Banks has to follow the guidelines of Central Govt., Indian Bank Association and all Govt. Rules and regulations in Toto.
Conclusion: Banks has to follow the guidelines of Central Govt., Indian Bank Association and all Govt. Rules and regulations in Toto.