Secured property valuation in lending activities of commercial banks under the law of Vietnam

Abstract

Secured property valuation in lending activities of commercial banks in particular and property valuation in general is an important step which decides the value of the credit that the bank is able to lend the customer, creates legal basis for the loan and limits the credit risks for the bank. Currently, property valuation in lending activities of commercial banks has not been consistently conducted and the related legal provisions have been scattered in various documents. Besides it, commercial banks have not consistenly applied the methods of property valuation; the result of valuation is different from the true market value of the valued property; the criteria for valution of many kinds of secured property have not yet been defined; etc. On the basis of analysing the current situation as mentioned above, the paper offers solutions to improve the law in this regard and to enhance the effect of secured property valuation in lending activities of commercial banks.