"Banks should have a board approved policy in place for valuation of properties including collaterals accepted for their exposures," RBI said in a notification to all states and district central co-operative banks.

The notification further said that the banks should obtain minimum two independent valuation reports for properties valued at Rs 50 crore or above.

At present, RBI said, different banks are following 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 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 or procedure for realistic valuation of fixed assets and also for empanelment of valuers for the purpose," it added.

Since market value of properties keep changing, the Reserve Bank said that it is necessary that revaluation reserves represent true appreciation in the market value of the properties and banks should have a comprehensive policy for revaluation of fixed assets owned by them.

"Such a policy should inter alia 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," it said.