The surveyors, who estimate the value of borrowers' properties mortgaged with banks, have been operating without registration and without following rules and regulations of the Bangladesh Bank (BB).
Moreover, there is not a single instance of taking action against these professional firms for their overvaluation.
The parliamentary standing committee on estimates recently recommended enactment of a law to bring the surveyors under some rules and regulations to get better services, especially in providing loans.
The issue came up at the 8th meeting of the estimates committee early this year while discussing various loan scams and bad loans of the two state-owned commercial banks Sonali and Agrani. They also discussed loan procedures.
Committee member Yusuf Abdullah Harun said the banks usually provide loan against the mortgaged properties which are often overvalued.
Another member Fazle Noor Taposh said some lawyers are involved with the valuation firms which are supposed to provide professional services. Some deed writers or middlemen are the owners of these firms. But banks and clients are not getting proper services from these firms leading to 95 per cent overvaluation, he pointed out.
Mr Taposh also indicated that it is not guaranteed as to whether the valuation is consistent with the mouza rate fixed by the government.
He suggested the committee can make recommendation to make these firms professional by enacting a law and prepare rules and regulations for their operation and recognition of their services.
Committee member AKM Jahangir Hossain made a query as to whether there is any example of taking action against any surveyor firm which has overvalued property.
Another member Sukumar Ranjan said this kind of firms must be brought under some rules. The Bangladesh Bank can do this.
Deputy governor of the BB SM Moniruzzaman said the central bank has no rules and regulations as these firms are not direct stakeholders. But banks provide them guidelines and those firms are self-controlled. Banks can take punitive action for their misdeeds but there is no such practice or instance. The firms are appointed as per their eligibility for valuation assessment.
He further felt that if banks could prepare any kind of rules, then both banks and the country will be benefited.
A senior banker of a state-owned commercial bank (SoCB) told the FE that there are several ways for assessment of valuation. For example, they can have it assessed by independent firms, then by branch-level bankers, by the zonal head or committee and finally the divisional head.
Denying overvaluation of property in 95 per cent cases, the banker, seeking anonymity, said there are current market price, forced sale value and mouza rate. Although the borrower appoints surveyors for valuation, the field managers must visit AC Land office and sub-registry office to verify the rates.
"We do not accept the surveyors' valuation although it has become a custom to have their assessment. They make our job a bit easier but we take decisions only on bankers' assessment.
He also noted that the surveyors should be brought under regulations so that their reports could be more reliable and banks can depend on those.
Former deputy governor of BB Khondker Ibrahim Khaled said surveyors' valuation is not reliable as those firms are not registered.
"I think valuation by the surveyors should be verified by a responsible banker through field visit. The reporting also should be independent for future record," he suggested.