OREANDA-NEWS. May 12, 2009. To protect from poor quality appraisal and to increase efficiency of credit activities, the Federal Antimonopoly Service (FAS Russia) agreed upon the recommendations about the criteria for selecting appraisers for long-term cooperation with the banks, which were devised by the Committee on appraisal activities, of the Association of Russian Banks (ARB), reported the press-centre of FAS Russia.

Those criteria are recommended for the member-banks of ARB and are devised in order to reduce the risks associated with appraisal of the property taken as collateral for crediting.

It is recommended that banks and appraisals should use those criteria when the bank did not order directly an appraisal report but uses the report to make a decision on granting a credit.

If the appraiser is not included in the list of the bank partners, it does not constitute sufficient grounds for the bank to refuse to consider the appraisal report. The bank's refusal to consider an appraisal report submitted by a potential borrower exclusively on the grounds that the appraiser is not included in the list of the bank partners can be considered as violations of the Federal Law "On Protection of Competition".

The major criteria for selecting appraisers include: level of partnership and reputation of the appraiser, work experience, business activity and professional qualities, experience of working with credit organisations, and some other structural and technical requirements.

Apart from the requirements on mandatory liability insurance of an appraiser under the Federal Law "On Appraising Activities in the Russian Federation", an appraiser must have liability insurance, not exceeding the size of an average credit product offered by the bank in the credit segment of expected cooperation with the appraiser.

According to the authors of the recommendations, on the one hand, the criteria for selecting appraisers for long-term cooperation with the banks will reduce probability of unsatisfactory appraisal which will positively affect the quality and promptness of credit decisions; on the other, it introduces requirements of transparency of the procedures for allowing appraisers to work jointly with the banks.