- It is a multi-purpose loan scheme where the finance obtained can be put to any urgent use faced by the borrower
- The loan can be offered as a bullet loan or as an overdraft facility
- The maximum amount granted under the bullet payment scheme is Rs.2 lakhs while for the overdraft facility scheme of the loan, a maximum amount up to Rs.50 lakhs can be availed against the pledged gold
- The gold is valued by the bank and the corresponding loan is issued. The valuation is done at 75% of the value of the gold ornament pledged or Rs.2000 per gram whichever is lower.
- The repayment tenure granted for repaying the loan is also dependent on the variant in which the loan is availed. For bullet repayments, a maximum tenure of 12 months is granted while for any other variant a maximum tenure of 36 months is granted for repayment.
- The loan is issued without any requirement of paying the processing fee
- A nominal membership is insisted up on when availing of the loan
- The borrower would have to pay the valuation charges as applicable at the actual rate. Moreover, if the borrower does not collect the pledged gold from the bank within one month after the loan account is closed, the bank would charge a a custody fee of Rs.300 for every quarter
- Any individual can apply for the loan provided he is the true owner of the gold jewelry or ornaments which are pledged as a security
- The gold pledged as a security should be preferably hallmarked though non-hallmarked gold is also accepted.
Rate of Interest
The bank charges a floating rate of interest for the Gold Loan Scheme. This rate depends on the bank’s Prime Lending Rate. The rate of interest payable by the borrower is the Prime Lending Rate less 2%. Since the Prime Lending Rate of the bank currently is 14.25%, the effective rate of interest is 12.25% per annum.
- The application form for the loan which should be filled in duly
- A photo identity proof and an address proof of both the applicant and the guarantor
- A declaration from the borrower stating that he is the true owner of the gold ornaments or jewelry which is pledged with the bank as a security.