VALUATION : PROFESSIONAL FEES

PRESCRIBED BY BANKS: UNIFORMITY IS

REQUIRED

Article By: B. Kanaga Sabapathy

Tiruchirappalli

1.0 FEES PRESCRIBED FOR VALUATION

1. Punjab & Sind Bank (issued by Zonal Office, Bhopal as on

11/09/2002)
Value upto Rs. 50,000/- - 1/2 %
Rs. 50,001/- to Rs. 1,50,000/- - 1/4 %
Rs. 1,50,001/- & above - 1/8%
With a maximum of Rs. 5,000/-

2) State Bank of India (Circular No. CIRCO/26/2004-05/ 07.09.2004,

State Bank of India, Local Head Office, Chennai .

First one lakh - Rs. 375/-

Second one lakh - Rs. 185/-

Subsequent every one lakh - Rs. 125/-

Maximum amount payable - Rs. 10,000/-

# For specific cases involving much higher value of property or for valuing
complicated property, the rates may be agreed on a case basis on mutual
discussions.

# Conveyance expenses and outstation expenses may be paid separately.

Service tax may be paid.

3) Union Bank of India ( Circular No. 7779/27.09.2007 by Central Office,

Mumbai-400 021)

The maximum professional fees payable for valuation of an asset will be as

under:

1) On first Rs. 50,000/- of the assets valued - 1/2% of the value

2) On the next Rs. 1.00 Lakh - 1/4% of the value
3) On the balance - 1/8% of the value
The total fees should not exceed Rs. 40,000/- for property valued above Rs.
1.00 crore and upto Rs. 5.00 crore and Rs. 50,000/- for property above Rs.
5.00 crore.

Upto Rs. 50,000/- Rs. 250/-

Above Rs. 50,000/-, upto Rs. 1,00,000/- Min. Rs. 250/-
Max Rs. 375/-
Above Rs. 1,00,000/-, upto Rs. 50,00,000/- Min. Rs. 375/-
Max. Rs. 6,563/-

Above Rs. 50,00,000/-, upto Rs. 1,00,00,000/- Min. Rs. 6,563/-

Max.Rs.12,813/-
Above Rs. 1,00,00,000/-, upto Rs. 5,00,00,000/- Min. Rs.12,813/-
Max. Rs.62,813/-
(limited to Rs. 40,000/-)
Above Rs. 5,00,00,000/- limited to Rs. 50,000/-

Further, where two or more assets in a particular account are required to be

valued at one time) then all such assets shall be deemed to constitute a single
asset for the purpose of calculating the fees of the valuer.

For outstation travelling and diem, actual tickets up to AC-II tier and Rs.
200/- day respectively may be considered for reimbursement. The above fee
structure is subject to negotiation at the time of giving each assignment as the
same is to be recovered from the borrowers, special care needs to be taken
while negotiating fees for revaluation of the assets already mortgaged to the
bank.

4) Sundaram Home Finance (Chennai)

Fess
Value upto Rs. 10 lakhs
Above Rs. 10 lakhs up to Rs. 20 lakhs
Above Rs. 20 lakhs up to Rs. 30 lakhs
Above Rs. 30 lakhs up to Rs. 50 lakhs
Rs. 1,000/-
Rs. 1,000/- + Rs. 100/lakh
Rs. 2,000/- + Rs. 50/lakh
Rs. 2,500/- + Rs. 50/lakh

Above Rs. 50 lakhs up to Rs. 100 lakhs Rs. 3,500/- + Rs. 50/lakh
Above Rs. 100 lakhs up to Rs. 300 lakhs Rs. 6,000/- + Rs. 50/lakh
Above Rs. 300 lakhs up to Rs. 500 lakhs Rs. 10,000/- (Maximum)
Layout Rs. 2,000/-
Others
Service tax as applicable
Outstation charges Rs. 500/- extra (above
50 Km.)

5) Indian Overseas Bank (Central Office, Chennai 600 002 Ref. :

Misc/174/2007- 08/17.11.2007)

1. Fees
On the first Rs. 50,000/- of the asset valued - 1/2% of the value
 Next Rs. 1,00,000/- - 1/4% of the valuer
And
On the balance of the asset valued - 1/8% of the value
Subject to a minimum of Rs. 250/- and maximum of Rs. 10,000/- for
valuation of land, building and machinery for each party account.

2. Conditions
i) Where two or more assets are required to be valued at the instance
of an assess, all such assets shall be deemed to constitute a
single asset for the purpose of calculating the fees.

ii) If the same property has to be revalued at the instance of bank,

50% of the above prescribed charges only is payable for the
second instances of valuation, provided the first set of valuation
report / documents are made available to the valuer.

6) Indian Bank (Central Office, Chennai-600 001 Circular: CPGD Lr.

5.2003/ 5.5.2003)

Category Fee, where the value Fees % age Fees payable (Rs.)
of property is
Minimum Maximum
A. Upto inclusive of Rs. 0.15% 200/- 300/-
5.0 Lakhs
B. 0.125% 750/- 1,250/-
Above Rs. 5.0 lakhs
upto and inclusive of
C. Rs. 10.0 lakhs 0.05% 1,250/- 5,000/-

Above Rs. 10.0 lakhs

D. up to and inclusive of Rs. 5000/- 5,000/- 10,000/-
Rs. 1.0 crore +
0.025%
Above Rs. 1 crore for
Rs. 10.0
lakhs

Note: The banks are advised to pay the fees (after deducting TDS whether
applicable by means of bankers cheque to the valuers on receipt of the
report. The bank does not permit the payment of fee to the valuers directly by
the borrower customers / owners of the property.

7. Vijaya Bank (Regional Office, New Delhi dated 25.04.2006)

Up to Rs. 1.50 lakh - Rs. 200/-

Rs. 1.50 lakh to Rs. 2.50 lakh - Rs. 250/-
Rs. 2.50 lakh to Rs. 5.00 lakh - Rs. 500/-
Above Rs. 5.00 lakh - Rs. 0.1% subject to maximum
of
 - Rs. 5,000/- per
facility/account

8) State Bank of Mysore (Head Office, Bangalore Circular no. 011/2003-

2004/ 12.02.2004)

On the first Rs. 50,000/- of the property so valued 1/2% of the value
On the next Rs. 1,00,000/- of the property so valued 1/4% of the value
On the next Rs. 50,00,000/- of the property so valued 1/8% of the value
On the balance of the property so valued 1/16% of the value

9) The Federal Bank Ltd. (Credit Control Department)

Fees
On the first Rs. 50,000/- - 1/2% of the value
On the next Rs. 1,00,000/- - 1/4% of the value
On the next Rs. 50 lakh - 1/8% of the value
On the balance of property value - 1/16% of the value
The fee payable as above is subject to a maximum of Rs. 5,000/-

Conditions
i) When two or more properties are required to be valued at the instance of
the borrower- all such assets shall be deemed to constitute a single asset for
the purpose of calculation of fees.

ii) If the property has to be revalued at the instance of the bank, 50% of the
charges are stipulated in the second or subsequent instances provided the
first valuation is made by the same valuer and subject to a maximum of Rs.
2,500/-.

iii) If the property is in the form of vacant / house site, fees payable shall be
50% of the normal charges subject to maximum of Rs. 2,500/- . In case of
more than one property one vacant land other not a vacant land valued, fee
maybe calculated separately with overall ceiling of Rs. 5,000/-.

iv) The expenses or travel is limited to and fro first class railway fare or actual
expenses if other modes of conveyance are used, whichever is less.

v) No halting allowance will be paid.

iv) The service tax payable may be added to the fees payable and income tax
shall be deducted at source wherever applicable.

10)Oriental Bank of Commerce (Head Office, New Delhi-110 001 Circular

No. HO/ ADV /27/2005-06/321/8.11.2005
1st Rs. 50,000/- of property so valued @ 1/ 2% of the value - Rs. 250/-
On the next 1 lakh of the property so valued @ 1/ 4% of the value - Rs. 250/-
For property of Rs. 1.50 lakh - Rs. 500/-
On the balance of the properties so valued @ 1/8% - Rs.125/-
per lakh
 The above rates are indicative only and rates may be fixed depending
upon the local conditions and in consultation with other banks operating in the
area. An upper cap of Rs. 10,000/- may be fixed. For very specialized or high
value properties the rates may have to be negotiated on case to case basis in
consultation with the owners of the property.

11) Syndicate Bank (Head Office, Manipal- 576 119 Circular No. 203/99/
BC/CR/64/CRPPD 14.10.1999)
Considering the over an increase in the cost of operation, it has been
decided to revise the valuation fees payable to approved valuers as per
following schedule subject to a minimum of Rs. 250/- and maximum of Rs.
10,000/- for each party/account.
a) On the first Rs. 50,000/- of the - at 1/2% of the value of property
property valued
b) On the next Rs. 1.00 lakh of the - at 1/4% of the value of the property
property valued
c) On the next Rs. 50.00 lakh of the - at 1/8% of the value of the property
property valued
d) On the balance of the property - at 1/16% of the value of the property
property valued

Branches may also note the following conditions :

1. Where two or more assets are required to be valued at the instance of

the borrower, all such assets shall be deemed to constitute a single
asset for the purpose of calculation of fees.

2. If the property has to be revalued at the instance of the bank, 50% of

the charges are stipulated in the second instance, provided the first set
of valuation report/ documents are made available to the valuer.

3. If the property is in the form of a vacant land / house site, fees payable
shall be 1/ 4% of value of the asset, subject to a maximum of Rs.
2,000/-.

4. In cases warranting interim reports at various stages of construction /

development for every valuation fees at the rate of Rs. 100/- per such
additional valuation are admissible. But this is again subject to a ceiling
of Rs. 10,000/- per party/ account.

5. The expenses for travel are limited to and for 2 nd class railway fare or
actual expenses if other modes of conveyance are used whichever is
less.

6. No halting allowance is allowed.

7. The service tax payable may be added to the fees payable and income
tax shall be deducted at source wherever applicable.
12. UCO Bank
Upto Rs. 50,000/- - Rs. 750/-
Rs. 50,0001 to Rs. 1.00 lakh - Rs. 1,000/-
Rs. 1,00,0001 to Rs. 50.00 lakhs - Maximum Rs. 1,000/-
Minimum Rs. 6,250/-
Rs. 50,00,001 and above - Minimum Rs. 6,250/-
Maximum Rs. 25,000/-
For outstation travelling and diem, actual railway tickets up to 1 st class and
Rs. 200 per day respectively, may be considered for reimbursement. The
above fee structure should be further negotiated with the valuers if the value
of the property is high.

13 Bank of India (Zonal Office, Bhopal Ref. No. ZO: Credit: MNT:
2292/27.01.1999)

On the first Rs. 50,000/- of the asset as value - 1/2% of the value
On the next Rs. 1 lakh of the asset as value - 1/4% of the value
On the balance of the asset as valued - 1/8% of the value

Where two or more asset are required to be valued, all such assets shall
be deemed to constitute a single asset for the purposes of calculating the
fees payable.

14) Life Insurance Corporation of India (Divisional Office, Bhopal Ref.

No. L&HPF/01.01.1998)

Up to Rs. 50,000/- -Rs. 250/-

Between Rs. 50,000/- to Rs. 1,00,000/- -Rs. 350/-
Between Rs. 1,00,000/- to Rs. 3,00.000/- -Rs. 350/- + 0.20% of the value
of the Property above
-Rs. 1,00,000/-
Between Rs. 3,00,000/- to Rs. 5,00,000/- -Rs. 750/- + 0.15% of the value
of the property above
-Rs. 3,00,000/-
Between Rs. 5,00,000/- to Rs. 20,00,000/- -Rs. 1,050/- +0.10% of the value
of the property above
-Rs. 5,00,000/-
Above Rs. 20,00,000/- -Rs .2,250/- +0.05% of the value
of the property above
- Rs.20,00,000/-

15) Punjab & Sind Bank (Zonal Office, Bhopal letter dated 11/09/2002)

Value up to Rs. 50,000/- - 1/2%

Rs. 50,001/- to Rs. 1,50,000/- - 1/4%
Rs. 1,50,001/- & above - 1/8% with max. of Rs.
5,000
16) Central Bank of India (Regional Office, Chennai RO: CR: 2005-
06:935/ 07.12.05)

1) First Rs. 50,000/- of the value of asset - 1/2% of the value

Next Rs. 1.00 lakh of the value of asset - 1/4% of the value
Above Rs. 1.50 lakhs - 1/8% of the value

2) If two or more assets are required to be valued all such assets shall be
deemed to constitute a single asset for the purpose of the payment of
valuation of fee. However if the secured asset is vacant land, the max.
amount of fees should not exceed Rs. 5,000/- and in other cases should
not exceed Rs. 10, 000/-.
3) A reasonable amount of conveyance charges may be reimbursed if the
work allotted is outside the area of the valuer (Mutually agreed to between
the valuer and the bank).

17) LIC Housing Finance Ltd. (letter dated 24.11.1998)

Up to Rs. 50,000/- - Rs. 250/-

Up to Rs. 1,00,000/- - Rs. 250/- + 1/ 4% of the value above
- Rs. 50,000/-
Above Rs. 1,00,000/- - Rs. 375/- + 1/8% of the value above
- Rs. 1,00,000/-

18) Can fin Homes Ltd. (Credit Dept, Bangalore ABM No. 130/98 dt.
11/08/1998)

Up to Rs. 50,000/- - 1/ 2% with a minimum of Rs. 250/-

Up to Rs. 50, 000/- to 1,50,000/- - 1/ 4% with a minimum of Rs. 500/-
Above Rs. 1,50,000/- - 1/8%

19) The Dhanalakshmi Bank Ltd. (Erode letter dt. 30/08/1998)

i) For Agricultural land / landed property only

Rs. 150/- per acre
Minimum of Rs. 250/- & maximum of Rs. 5,000/-
ii) For land with building
Land valuation as per ceiling as above
Building @ 0.1% of the value of the building
Minimum of Rs. 400/- & maximum of Rs. 10,000/-

20) Andhra Bank (Credit Risk Management, Head Office, Hyderabad

Circular No. 38/26.04.2004)

1) Fees payable to Valuation

 If the property is in the form of a vacant land / house site, fee payable
is 0.25% on the value of the property subject to a maximum of Rs.
2,000/-. In the case of other properties, the fee payable is 0.25% on
the value of property subject to a maximum of Rs. 10,000/-.

2) Fees payable on revaluation

The fee payable in case a revaluation is done by the same engineer
who had originally valued the property shall be as follows:
If property is in the form of a vacant land / house site, payable is
0.125% on the value of the value of the property subject to a
maximum of Rs. 1,000/-. In case of other properties, the fee payable is
0.125% on the value of property subject to maximum of Rs. 5,000/-.

3) Re-imbursement of outstation expenses incurred

To & fro 1st class / AC 2 tier fare boarding / lodging at the rate of Rs.
250/- per day at all district Head quarters / cities and Rs. 150/ day at
other centers. The expenses reimbursed are to be recovered from the
borrower.

21) The South Indian Bank Ltd. (Circular No. CCD/078/97-98 dt.
29.12.1997)
1) The fees or charges for valuation of building, machinery, etc. will be
0.1% of the value of the securities under valuation with a minimum of
Rs. 500/- and a maximum of Rs. 10,000/-.
2) For the purpose of fees calculation, different properties, building or
machineries situated in the same location will be treated as one
valuation and maximum fees payable will be Rs. 10,000/- only.
3) Where securities are situated at a distance beyond 100 Kms, actual
travelling expenses limited to 1st class train fare, if connected by rail, or
taxi fare at the approved rate will be reimbursed against the voucher
produced or self declaration submitted. Where own vehicle is used, Rs.
2.50/- per Km. Will be paid.
4) The fees / charges for the valuation along with the travelling expenses
if any, to be reimbursable, will be paid by the bank directly and I
undertake that no amount, on any account, will be collected from the
customers directly.

22 Corporation Bank (Regional Office, Coimbatore RO/CBE/ILRD/OR/

594/99- 31.01.2000)

On the first Rs. 50,000/- of the property so valued - 1/ 2% of the value

On the next Rs. 1,00,000/- of the property so valued 1/ 4% of the value
On the next Rs. 50,00,000/- of the property so valued 1/8% of the value
On the balance of the property so valued, 1/16% of the value.

22) Karnataka Bank

Up to Rs. 50,000/- - Rs. 250/-
Rs. 50,001/- to Rs. 1,00,000/- - Rs. 350/-
Rs. 1,00,001/- to Rs. 3,00,000/- - Rs. 350/- + 0.2% of above 1.0 lakh
Rs. 3,00,001/- to Rs. 5,00,000/- - Rs. 750/- + 0.15% of above 3.0 lakh
Rs. 5,00,001/- to Rs. 20,00,000/- - Rs.1,050/- + 0.1% of above 5.0 lakh
Maximum fees - Rs. 4,000/-

24) ING Vysya Bank

a) In case of land & building

On the first Rs. 50,000/- - 0.5% of the value
On the next Rs. 1,00,000/- - 0.25% of the value
In the excess of Rs. 1,00,000/- - 0.125% of the value
Subject to a maximum of Rs. 7,500/- for each property valued.

B)In case of vacant land / house site - 0.25% of the value

Subject to a maximum of Rs. 2,000/-

25) Canara Bank (Bangalore Circle)

Up to Rs. 50,000/- - 1/2%
Rs. 50,001/- to 1,50,000/- - 1/4%
Balance asset - 1/8%

For valuation of stocks the max. fees - 50,000/-

26) HUDCO
Fees is as per the norms prescribed in the Wealth Tax Act, 1957 (i.e.
CBDT rates).
27) Bank of Baroda

Rs. 50,000/- of property valued - Rs. 250/-

Rs. 50,001/- to Rs. 1,00,000/- - Rs. 350/-
Rs. 1,00,001/- to Rs. 3,00,000/- - Rs. 350/- + 0.2% of above 1.0 lakh
Rs. 3,00,001/- to Rs. 5,00,000/- - Rs. 750/- + 0.15% of above 3.0 lakh
Above Rs. 5,00,000/- - Rs. 1,050/- + 0.1% of above 5.0 lakh

28) Punjab National Bank (Circular : CPY- 22/15.02.2003, Credit Policy &
Management
Division, New Delhi)
Rs. 20 Lakhs & above but less than 50 Lakhs - Rs. 2,000/-
Rs. 50 Lakhs & above but less than 1 Crore - Rs. 4,000/-
Rs. 1 Crore & above but less than 5 Crore - Rs. 7,000/-
Rs. 5 Crores & above - Rs. 10,000/-
The fees prescribed above are maximum and branches may negotiate the
fees on case to case basis according to quantum of work involved. In case of
a borrower, where a number of properties are to be valued, spread over
different locations, the incumbents shall negotiate the consolidated fee lower
than those prescribed above.
29)
 Note :
1) The fees expressed as above is as on March 2008 and based on the
available particulars. If there is any correction or revision, the fact may
please be highlighted.
The practicing valuers may please note that the fees structure may vary
from place to place and they are requested to verify.

2.0 REMARKS BY THE AUTHOR:

1) The fees prescribed by the Central Board of Direct Taxes as well as

the Institution of
Valuers is as follows :

For Rs. 50,000/- of value : 1/2%

For next Rs. 1,00,000 of value : 1/4 %
Above Rs. 1,50,000 : 1/8%
In simple words
First one lakh : Rs. 375/-

Second one lakh : Rs. 185/-

Subsequent every one lakh : Rs. 125/-

2) The Reserve Bank of India in its circular has given guidelines to all the
banks that the panel valuers should be the valuers be the valuers
registered with the Central Board of Direct Taxes under section 34AB
of Wealth Tax Act. Many banks prefer their panel valuers should be the
life members of Institution of Valuers, of Valuers, Delhi, the
only professional body meant for valuers.

3) When the above is a fact, then the valuers are eligible to get fees
prescribed by the Central Board of Direct Taxes and the Institution of
Valuers.

1) But it is not known why different banks adopt different yardsticks while
prescribing the professional charges.

1) Different zones adopt different fees (and it is a pity that some of the
branch managers adopt their own fees in order to favor the borrowers)
and some of the regions follow different patterns for housing schemes.

2) Central Board of Direct Taxes and Institution of Valuers have not flxed
any ceiling whereas some of the banks have flxed ceiling such as Rs.
4,000, Rs. 5,000, Rs. 7,500, Rs. 10,000, Rs. 25,000, Rs. 50,000, etc.
There is no uniformity at all.

3) Some banks have fixed one ceiling to landed property and another
ceiling for land & building property. Many people think that doing
valuation of land is easy whereas it is no so, actually.
 4) i) As per CBDT norms, If two or more assets are required to be
valued, all such assets shall be deemed to constitute a single asset for
the purpose of payment of valuation fees.

ii) But CBDT & Institution of Valuers have not flxed any upper ceiling.

iii iii) Some of the banks have fixed a ceiling of Rs. 10,000/- and they
iv stipulate further that the same ceiling holds good for any number
v of assets.
There is no logic at all. How can a valuer do n number of valuations
requested by a borrower for properties situated at different locations
and is expected to receive a ceiling of a meager Rs. 10,000/-. What is
the guarantee the borrower obtains the reports and will not use for
other purposes ? The valuer becomes a victim and the borrower
becomes smart. In other words, the borrower is provided with an
option to split the reports as he wishes and the valuer is deprived from
getting his rightful due for such a split.

iv) No doubt the borrower is an important person for any bank but the
vi bank should respect the valuers also. Due regard is to be given to the
vii professionals.
viii
ix v) In some case, the bank manager pleads for a lower fees since the
x facility granted is too small when compared to the value of the asset.
xi No control is there to compensate the valuer when the limit is raised
xii later on.
xiii
xiv 5) Personally I suggest the following:
The professional charges payable to the panel valuers may be

i) Rs. 125 for everyone lakh of value subject to a maximum of Rs.

10,000/- for first one crore of property value and Rs. 5,000/- for every
additional one crore of value.
xv
xvi ii) Travelling & accommodation boarding, photo expenses at actual &
xvii service tax, if applicable is to be added.
xviii
xix iii) For very high value properties, complicated & tedious properties or
xx less value properties which involve more labour, etc. the fees could
xxi mutually be fixed.

3.0 CONCLUSION

The client and the banker should be made to realize and recognise that
Valuation is not a mere application of principles. It is an application of
mind.
The experience and expertise a valuer brings into his profession are
irreplaceable.

The responsibility of the valuer in terms of the correctness of the value

 assessed is onerous.

A good professional valuer could save the bank from sticky accounts by
assessing the realized value correctly (if the purpose of valuation is for
mortgage).

The fee paid to a valuer is not only for his work, but also for the
responsibility he shoulders.

When the assessed value is high, the fees may appear to be large, but the
responsibility undertaken is also immense.

The valuer is always on the bankers side. He wants to take care the
Banks interest first.

The valuers expectation is :

LET THERE BE UNIFORMITY AMONG ALL THE BANKS IN THE

COUNTRY WITH REGARDS TO THE PROFESSIONAL FEES.

xxii