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Guidelines for valuation of property and assets & liabilities in case of mergers

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The independent auditors (Chartered Accountants) appointed by the transferee bank with the concurrence of DICGC should value the property and assets and reckon the liabilities of the transferor bank in accordance with the following provisions:


1 Cash & bank balances

Cash & bank balances are to be reckoned at their book value unless there is reasonable doubt about the repayment of deposits by the banks with which such balances are held. In the latter case, the realizable value of the deposits may be ascertained and reckoned, taking into account the financial position of the bank concerned and the facts and circumstances relevant for such assessment.


2 Investments

i) Investments including Government securities shall be valued at the market rates prevailing on the day immediately preceding the date of merger or at the rate as prescribed by Reserve Bank of India under investment guidelines, provided that the securities of the Central Government such as Post Office...

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