Sunday, March 04, 2007

Legal Representatives for Appelate tribunal

Right to legal representations

22C. The appellant may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers or present his or its case before the Securities Appellate Tribunal.

Explanation. - For the purposes of this section, -

1. "chartered accountant" means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;
2. "company secretary" means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;
3. "cost accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;
4. "legal practitioner" means an advocate, vakil or an attorney of any High Court, and includes a pleader in practice.40

Valuation in Banks RBI

RBI No.2006-2007/224
DBOD.BP.BC No. 50 / 21.04.018/ 2006-07
January 4, 2007
The Chairmen/Chief Executives
All Commercial Banks
(excluding RRBs)
Dear Sir,
Valuation of Properties - Empanelment of Valuers
It has been observed that different banks follow different policies
for valuation of properties and appointment of valuers for the
purpose. The issue of correct and realistic valuation of fixed assets
owned by banks and that accepted by them as collateral for a sizable
portion of their advances portfolio assumes significance in view of
its implications for correct measurement of capital adequacy position
of banks. In this context, there is a need for putting in place a
system/procedure for realistic valuation of fixed assets and also for
empanelment of valuers for the purpose.
2. Banks may be guided by the following aspects while formulating a
policy on valuation of properties and appointment of valuers:
(a) Policy for valuation of properties
i) Banks should have a Board approved policy in place for valuation of
properties including collaterals accepted for their exposures.
ii) The valuation should be done by professionally qualified
independent valuers i.e. the valuer should not have a direct or
indirect interest.
iii) The banks should obtain minimum two Independent Valuation Reports
for properties valued at Rs.50 crore or above.
(b) Revaluation of bank’s own properties
In addition to the above, the banks may keep the following aspects in
view while formulating policy for revaluation of their own properties.
i) The extant guidelines on Capital Adequacy permit banks to include
revaluation reserves at a discount of 55% as a part of Tier II
Capital. In view of this, it is necessary that revaluation reserves
represent true appreciation in the market value of the properties and
banks have in place a comprehensive policy for revaluation of fixed
assets owned by them. Such a policy should interalia cover procedure
for identification of assets for revaluation, maintenance of separate
set of records for such assets, the frequency of revaluation,
depreciation policy for such assets, policy for sale of such revalued
assets etc. The policy should also cover the disclosure required to be
made in the 'Notes on Account' regarding the details of revaluation
such as the original cost of the fixed assets subject to revaluation
and accounting treatment for appreciation / depreciation etc.
ii) As the revaluation should reflect the change in the fair value of
the fixed asset, the frequency of revaluation should be determined
based on the observed volatility in the prices of the assets in the
past. Further, any change in the method of depreciation should reflect
the change in the expected pattern of consumption of the future
economic benefits of the assets. The banks should adhere to these
principles meticulously while changing the frequency of
revaluation/method of depreciation for a particular class of asset and
should make proper disclosures in this regard.
(c) Policy for Empanelment of Independent valuers
i) Banks should have a procedure for empanelment of professional
valuers and maintain a register of 'approved list of valuers'.
ii) Banks may prescribe a minimum qualification for empanelment of
valuers. Different qualifications may be prescribed for different
classes of assets (e.g. land and building, plant and machinery,
agricultural land, etc.). While prescribing the qualification, banks
may take into consideration the qualifications prescribed under
Section 34AB (Rule 8A) of the Wealth Tax Act, 1957.
3. Banks may also be guided by the relevant Accounting Standard issued
by the Institute of Chartered Accountants of India.
Registration of valuers.
34AB. (1) The 32[Chief Commissioner or Director General] shall
maintain a register to be called the Register of Valuers in which
shall be entered the names and addresses of persons registered under
sub-section (2) as valuers.
(2) Any person who possesses the qualifications prescribed33 in this
behalf may apply to the 34[Chief Commissioner or Director General] in
the prescribed form35 for being registered as a valuer under this section:
Provided that different qualifications may be prescribed for valuers
of different classes of assets.
36(3) Every application under sub-section (2) shall be verified in the
prescribed manner, shall be accompanied by such fees as may be
prescribed and shall contain a declaration to the effect that the
applicant will
(i) make an impartial and true valuation of any asset which he may be
required to value;
(ii) furnish a report of such valuation in the prescribed form;
(iii) charge fees at a rate not exceeding the rate or rates prescribed
in this behalf;
(iv) not undertake valuation of any asset in which he has a direct or
indirect interest.
37(4) The report of valuation of any asset by a registered valuer
shall be in the prescribed form and be verified in the prescribed manner.
Qualifications of registered valuers.
8A. (1) For the purposes of sub-section (2) of section 34AB, the
qualifications for registration as valuers of different classes of
asset shall be as specified in sub-rules (2) to (11).
(7) A valuer of stocks, shares, debentures, securities, shares in
partnership firms and of business assets, including goodwill but
excluding those referred to in sub-rules (2) to (6) and (8) to (11),
shall have the following qualifications, namely :
(i) he must be a member of the Institute of Chartered Accountants of
India or the Institute of Cost and Works Accountants of India 62[or
the Institute of Company Secretaries of India]; and
(ii) 63[(A) he must have been in practice as a chartered accountant or
a cost and works accountant or a company secretary for a period of not
less than ten years and his gross receipts from such practice should
not be less than fifty thousand rupees in any three of the five
preceding years, or]
(B) he must be a person formerly employed
(a) in a post under Government as a gazetted officer, or
(b) in a post under any other employer carrying a remuneration of not
less than Rs. 64[2,000] per month,
and, in either case, must have retired or resigned from such
employment after having rendered service for a period of not less than
65[ten] years in the field of audit and accounts or taxation work 66[, or]
66[(c) as a Company Secretary 67[or a Deputy Company Secretary] or an
Assistant Company Secretary in a post carrying a remuneration of not
less than Rs. 68[2,000] per month and must have retired or resigned
from such employment after having rendered service for a period of not
less than 69[ten] years.]