INSTITUTE OF MANAGMENT STUDIES, DAVV, INDORE

FINANCE AND ADMINISTRATION – SEMESTER IV

CREDIT MANAGEMENT AND RETAIL BANKING

LOAN AGAINST PLEDGE OF GOLD ORNAMENTS

OBJECTIVE/ PURPOSE
 General purpose loan to properly introduced or well known individuals
singly or jointly, having bonafide ownership of ornaments

ELIGIBILITY

 Age : Over 21 years having proper introduction.

 Income (Minimum) : Steady source of income having minimum
capacity to service the interest.

LOAN AMOUNT:
 To be need base / value of Gold less usual margin

MARGIN
 30% of value of 24 carat Gold Published in Daily Financial News Paper

INTEREST
 Normally floating rate of interest linked to base rate/ MCLR of bank.

REPAYMENT

 By EMIs or one lump sum

TYPE OF LOAN
 Demand Loan or Overdraft

SECURITY
 Minimum acceptable purity : 18 carats.
 Pledge of Gold ornaments
 Primary gold (i.e. 24 carat gold bars and biscuits) cannot be accepted

FOLLOW-UP
 To regularly monitor the OD Accounts of the borrowers so that no
borrower misutilise the facility by keeping the valuables safely without
drawing sufficiently on their O.D. A/c.

OTHER PAPERS & DOCUMENTATION

 Declaration as to bonafide ownership of ornaments

 Gold tester's certificate-cum-undertaking of the borrower(s)
 Pledge letter
 Security Receipt Acknowledgement (on closure)

Prepared by :
Arvind Paranjape, M.Sc., CAIIB
paranjape.arvind@yahoo.com
9425067026