Talk on Recent trends & Challenges in the Field of

Transcript:Talk on Recent trends & Challenges in the Field of:
Talk on Recent trends & Challenges in the Field of Valuation By Murad M. Lakhani Jigesh J. Mehta Organized by INSTITUTE OF SCIENCE & TECHNOLOGY FOR ADVANCED STUDY & RESEARCH (ISTAR) At VallabhVidhyanagar On 14th Dec. 2013 REAL VALUE CONSULTING SERVICES Legal Study – I (Auction Sale) Recent trends & Challenges in the Field of Valuation Overview of presentation: Purpose for which major valuation assignments are done in retail profession. Difference in practices followed by Private banks & Nationalized banks. Difference in approach of a Valuer for different banks & Financial Institutions. Perception of a Valuer for difference in approach. Recent trends followed by private banks & nationalized banks. Challenges faced by a Valuer due to the difference in trends. Conclusion. REAL VALUE CONSULTING SERVICES Legal Study – I (Auction Sale) Purpose for which major valuation assignments are done in retail profession. Mortgage purpose Fiscal purpose Capital gains tax Wealth tax Stamp duty purpose Visa purpose REAL VALUE CONSULTING SERVICES Legal Study – I (Auction Sale) Difference in practices followed by Private banks & Nationalized banks. The major assignments done by a retail Valuer is for mortgage purpose. The services of a Valuer are taken by Nationalized banks, private banks and Non banking Financial Institution (NBFC). The basic issue arises for a Valuer due to the difference in approach and policy of the financial institution. The Nationalized banks have a panel of valuers and the client / consultant approaches the valuer and the assignment is done after negotiaition in fees and value required. Higher the market value report and lower the fees charged by a valuer gets the assignment. This practice creates a scenario of bargaining between the Valuer and the client / consultant. On the other side the private banks and NBFC have a different set up. The sales team always expects a higher market value while the credit team verifies the report with their sources. The fees payable is through the bank and is always fixed regardless the value of the property. REAL VALUE CONSULTING SERVICES Legal Study – I (Auction Sale) Difference in practices followed by Private banks & Nationalized banks. In nationalized banks there are almost no referral checks done while the report is submitted but the liability arises when the party defaults and the bank cannot reimburse the amount financed against the property mortgaged. In private banks, mostly two opinions from valuers are seeked and