The
Presidents/Chief Executives,
Alll
Banks/ DFIs
Dear
Sirs/Madam,
PRUDENTIAL
REGULATIONS-
REQUIREMENT OF DESKTOP & FULL-SCOPE EVALUATION
Please refer to R-8 & 11 of Prudential Regulations for
Corporate and Commercial Banking and SME Financing respectively,
wherein the requirement of conducting Full-scope and Desktop
Evaluation have been mentioned.
2.
The following clarifications/modifications may be noted
in respect of the above two evaluations.
Desktop valuation is, hereby, defined as “an Interim
Brief Review of Full-scope Evaluation, so that any significant
change in the factors, on which the full-scope valuation
was based, is accounted for and brought to the notice of
the lending bank.”
• In case the loans exceed 10% of the banks/DFIs’
equity, the Desk-top valuation will be done by the same
evaluator, who had conducted the full-scope evaluation,
(the evaluator should be on the approved panel of the PBA);
whereas, for loans below this threshold, the securities
can be evaluated by the banks themselves. For conducting
Desktop Evaluation, the evaluators will pay a short visit
to the bank and the borrower’s site. The bank’s
responsibility in this respect will be to ensure that the
evaluator is contacted for conducting Desktop Evaluation,
and will provide all necessary information to the evaluators,
which are materially important for the interim review (Desk-top
Evaluation).
• The Desktop Evaluation will only be for the use
of credit management purpose of the respective banks, thus
the same will have no impact on provisioning requirement,
assessed on the basis of Full-scope evaluation.
• In cases where the evaluators are not allowed by
the borrowers to enter in their premises, the full-scope
evaluation, conducted as such, will not be accepted for
provisioning benefit.
•
Full-scope and Desktop Evaluation are not required in case
of Housing Finance under Prudential Regulations for Consumer
Finance.
3. Other instructions on the subject will remain unchanged.
4. Please acknowledge receipt