The Hindu Business Line : RBI cautions UCBs on property valuations

IN a circular addressed to the chief executives of all primary (urban) co-operative banks, the Reserve Bank of India has cautioned them on unrealistically high valuations of property for while granting mortgage loans.

Said the release from the central bank, "Certain instances of housing loans granted against mortgage of house property, the value of which has been shown to be unrealistically high, have come to our notice. In such cases, the possibility of banks incurring a loss in the event of a need arising to recover the loan through disposal of the security is very high.''

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