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ViTA_DATAJIACX-UP VavIteWit 2016-17\ br cir
7\ br cir\july
\july2016\
2016bu
\ bu rural
rural revised
revised goldgold ban policy.docx
ban policy.docx
tO
415 Vag.
Vriag. N‘
p.tiK
jj4K OR\\
0,e.
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•
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 Bank of
ofIndia
India
Head Office
Office BU
BU --Rural
Rural
Branch Circular No. : 0/- Sub: Rural/
Sub: Rural/20145-1f
2016-112.
Sub-subject: Genera
Ref : HO/Rural/S KG
HO/Rural/SKG Date
Date: 0
j_3

CIRCULAR TO
CIRCULAR TO ALL
ALL BRANCHES
BRANCHES /I OFFICES
OFFICES

Master Circular.
Master Circular.

Scheme for
Scheme forfinancing against
financing Gold/Gold
against Jewellery/
Gold/Gold Jewellery/
Gold coins:
Gold coins:Revised GoldGold
Revised Loan Loan
Policy.Policy.

Bank has been extending financial assistance against gold ornaments since 1976
to facilitate one more avenue for institutional credit particularly in rural/semi urban areas.
Certain modifications have been made in the scheme from time to time to make it more
competitive. Detailed scheme was advised vide HOBC. No.91/120 dated 07.10.1997.
The scheme was last reviewed and advised vide our HOBC No.106/171 dated
22.01.2013. Modifications in Administrative Clearance, in line with RBI directives for
specially minted gold coins along with quantum of advance and sanctioning authority
etc. were advised to branches vide HOBC No. 107/153 dated 06.11.2013. Recently,
revised LTV and ROI were advised to branches vide HOBC NO. 109/196 dated
28.01.2016.
2. Gold loan forms sizeable part of our Bank's agricultural advance portfolio, which
provides good support for achieving the regulatory budgets. It is the main avenue for
short term loans against pledge of gold jewellery, particularly in rural and semi-urban
areas having huge potential for lending against gold.
3. Keeping in view the present market scenario, to improve our market share as well
as to compete with other peer banks it has been decided to revise our Gold Loan
Scheme. The major modifications made in the existing Gold Loan Scheme are as under:

a. Valuation of Gold Ornaments and 75% of the value of the Gold or 75% of the
Coins card rate i.e. rate given by the Head Office
(Weekly) whichever is lower.

b.
d. Quantum of Finance For Agriculture:
For Agriculture:
Minimum Rs. 1,00,000/-
Maximum Rs.25,00,000/-
For SME/Retail:
For SME/Retail:
Minimum: No limit.
Maximum Rs.25,00,000/-
For Other
For OtherPurpose:
Purpose:
Minimum: No limit.
Maximum Rs.10,00,000/-
Rs.10.00,000/-
ttils
/.44:117 Pf4>\
.,="s•
 2.

c. Rate of Interest
G. 1.Gold
1. Goldloan for agriculture
loan purposespurposes
for agriculture
a. For
a. crop
For loan/
crop KCC: KCC:
loan/
9.40 % (1Yr.MCLR) + 0.30 % (BSS) + 0 %
(CRP) = 9.70%.
b. Other
b. than
Other CropCrop
than loan/loan/
KCC: KCC:
9.40% (1Yr.MCLR) + 0.30 % (BSS) + 0.50%
(CRP) = 10.20%
2. Gold loan
2. loanforfor
non-agriculture / SME / / SME /
non-agriculture
OPS purposes:
OPS purposes:
9.40% (1Yr.MCLR) + 0.30% (BSS) + 0.50%
(CRP) =10.20%.
3. Gold
3. Gold loan
loanforfor
other purposes:
other purposes:
9.40% (1Yr.MCLR) + 0.30% (BSS) + 2.75 %
(CRP) =12.45%

d. Processing
d. Processing Charges
Charges For
For loan
loanupup
to and including
to and Rs.1 Iakh:
including Nil. lakh: Nil.
Rs.1
Over Rs.1 Iakh:
Over lakh: Rs.150/- per Iakh
Rs.150/-per lakh ++
applicable
applicable service tax. tax.
service

e.
e. Valuation
Valuation Charges
Charges Rs.5/-
Rs.5/- perper
Rs.1000/-
Rs.1000/-
Min.
Min.Rs.100/-
Rs.100/-
Max.Rs.500/-
Max.Rs.500/- perper
valuation.
valuation.

f.
f. Sanctioning
Sanctioning Authority
Authority Authority
Authority Limit
Limit
(Irrespective
(Irrespective of category).
of category). Scale-I
Scale-I Rs.
Rs. 4.00
4.00 Lakh
Lakh
Scale-II
Scale-II Rs.10.00
Rs.10.00LakhLakh
Scale-III
Scale-III & above
& above Full
Fullpowers
powers

g.
g. Introduction
Introductionof Gold
of Testing Machine Machine
Gold Testing / Gold Purity Analyzer
/ Gold Machine.
Purity Analyzer Machine.
j

4.
4. The policy has been
beenapproved
approvedby by
Board in its in
Board meeting held on 14.06.2016
its meeting held on which
14.06.2016 whic
is enclosed
is enclosedas per
as Annexure.
per Annexure.

5.
5. During
Duringreview
review of business at various
of business levels by Top
at various levelsManagement regarding ourregarding o
by Top Management
market
marketshareshare in in
loanloan
against gold/ gold
against gold jewellery,
jewellery, itit is
is found
found toto bebenegligible and is and
negligible
shrinking
shrinking continuously.
continuously.Loan against Gold / Jewellery
Loan against Gold / is is fully secured,
Jewellery
fully secured,easy easy
to handle
to handle
and hassle
hassle free which
free can be
which exploited
can keeping inkeeping
be exploited view our ourinlarge
largecustomer basebase
customer pan pan
India.
India. Therefore
Thereforeall NBGs
all /NBGs
Zones/ / Zones
Branches are requested
/ Branches aretorequested
start puttingto
best of their
start putting best
efforts
efforts to generate
to generategood business under this
good business sector.
under this sector.

6.
6. Details
Details of the
of scheme
the schemeis enclosed, which is more customer
customerfriendly containing
friendly all
containing all
updated
updated guidelines.
guidelines. There is
is an urgent
There urgent need
need to make
to makeall-out efforts to
all-out popularize
efforts to the
popularize t
scheme
scheme amongst
amongst households,
households, farmers, villagevillage
farmers, artisans, artisans,
Small entrepreneurs and
Small entrepreneurs
businessmen covering
businessmen covering villages, small towns,
villages, smallurban and urban
towns, metropolitan areas. Such
and metropolitan areas. S
marketing
marketingefforts
efforts will
will not
not only
only help branches
help branchesto augment gold loan
to augment goldportfolio
loan but will
will
portfolio but
support
supportthem
them in in
achieving regulatory
achieving budgets under
regulatory budgetsAgriculture and Priority Sector.
under Agriculture and Priority Sector.

(D.P.
(D.P.ISHRA)
ISHRA)
ENERAL
ENE AL MANAGER
MANAGER
Kanchan \rural d\SKG\Note-Gold
6nchan \rural Loan-120l
d\SKG\Note-Gold & increase
Loan-ROl in LTV-CRMC.docx
& increase in LTV-CRMC.docx
 1

CONTENTS

S.No. Particulars Page No. --

Page No.
1 Preamble 2
2 Scope
2 Scope _ 3
L __ 3 Implementation of the Scheme
3 _ I Implementation 3
4 Eligibility 3
5 Purpose of gold loan 4
6 Assessment of loan amount 4
7 Appraisal of gold ornaments & coins 4
8 Valuation of gold ornaments & coins 5 ._
9 Maximum amount of loan 5
10 Delegation of powers 6
11 Rate of interest 6
12 Service charges 6
13 Type of facility ' 6
14 Repayment period
Repayment 6
15 Documentation 8
16 Disbursement 8
17 Insurance 8
18 Restriction on gold loan 9
19 Selection of valuer 9
20 Gold testing machine / Purity Analyzer machine 11
21 Valuation certificate 13
22 Precautions to be taken at the time of appraisal (Annexure- 13
I)
I)
23 Prevention of fraudulent activities by appraisal (Annexure-II) 17
24 Physical securities of gold ornaments & coins 18
25 Joint custody & rolerole of
of joint
oint custodians 18
26 Delivery of ornaments & coins to the borrowers 19
27 Inspection by internal auditors 21
28 Maintenance of gold loan register • 22
29 Diligence in obtaining & maintaining security 22
30 Post sanction monitoring 23
31 Auctioning of ornaments & coins 23
32 Due Diligence report of Jewel Appraiser [Annexure 26
(A)1
33 Indemnity Letter by jeweler [Annexure 28
(B)]
34 Valuation Report by Gold Analyzer Machine [Annexure 30
.___. _ (C)1
(C)]
35 Valuation Certificate by Appraiser [Annexure 31
kun
(D)]
36 Recall Notice to the borrower [Annexure 32
(E))
(E)]
37 Auction Notice to the borrower
borrov [Annexure (F)1 33
-----
38 Sale Notice to the borro ,,- rs/A-T E
-,LTA-T /(N [Annexure 34
It
,12.
(G)1
(G)J iedo wag tt k--e:w 0.....
..,39
t:'-:,39 Notice for Public Au , p gii BBoard Meeting
"rct "s"ting y
-'i
-. [Annexure 35
o
.'.- (H)]
(HA -"tr
NT ii ItiN zoir
1 4 !UN 2011 5
1 5
: 0
4J1:40 Memorandum
Memorandum • ro ro• o Mli;P- .gb' Pfortam tam- is Annexure(D]
[Annexure I 36
i7rq
-1.6.714
. j,41,41 Certificate
Certificate of of Revalua BrAdosEmpa.5.1
Revalua'tipv. WO SEVELIRA1 [Annexure (J)]
OA 38
•
 2

GOLD LOAN
1. Preamble:

1.1 prosperity
Indian society since long has considered gold as a symbol of prosperity.
In India, gold is historically and culturally tied to the concept of wealth and
prosperity. Consumer demand still remains high as Indians believe gold
offers the best protection against inflation. Traditionally, gold has been
perceived as the safest asset during the periods of financial and economic
stress.

1.2. India is the world's largest consumer of gold as gold consumption is an

integral part of India's culture and tradition. Demand for gold in India is
mainly driven by jewellery demand rather than by investment or industrial
demand. The high demand in the domestic gold market is fulfilled through
import since production of gold in India is not even a fraction of its gold
consumption.

1.3. It is estimated that almost entire gold jewellery stock of our country is kept
idle at home or in locker. Gold kept at home or locker is not a productive
asset. Idle gold does not generate any cash flow unlike other productive
assets, though value may appreciate with increase in market price of gold.
Hence, a need has been felt to facilitate monetization of investment in
gold. Gold loan is an avenue to convert idle gold into productive assets.

1.4. The key players in the organized gold loan market are Public Sector
Banks, Private Sector
Sector Banks,
Banks, Co--operatives,
Co-operatives, NBFCs
NBFCs and RRBs.
Unorganized gold loan market mainly comprises local
pawnbrokers,goldsmiths and money lenders, many of them are also
engaged in the business of gold ornaments. Players in the unorganized
sector have traditiona:ly
traditionally dominated the gold loan market for many
centuries and still command majority of the market.

15 Gold loan has vast scope in India since loans are availed only against a
minuscule portion of total gold stock of the country. Our Bank has more
than three decades of satisfactory experience in gold loan business.
Traditionally, gold loan market is concentrated in five southern
states.However, acceptance of gold loans is rapidly increasing in the other
parts of the country. Much of the future market growth is expected to
originate from other parts of the country.

1.6. Organized gold loan market has been growing at the rate of 40% in the
last decade. Since rural ctss higher
higher gold
gold stock,
stock, it is also expected
that rural India
India will
will
it , litiViV6tri
54400 lkcantly in future
8gtritylFkcantly growth
in future growthofofgold
gold loan
loan
market.
market. AsAs
thethe m kC
m4titiM - is,:auVectilyVhder-penetrated,
tsmiautiectily er-penetrated, gold loan will offer
.11 Li,
enough opportunitl
enough opportunitnvtoi toi9.vju k3aNk
ustRaA fogfoortfolio
ortfolioexpansion
expansion not not only
only in
in our
existing market
existing marketinin> tatet
tat'S but also
,,. but also inin the
the other
other parts of the
clittr
country. t>. !von
. Xr-lntAta,
.vmn ,,,,
, ,,
 3

2 Scope:

2.1
21 This circular will govern loan extended to individuals against security of gold
ornaments/ coins.However, gold loan for domestic jewellery manufacturers/
exporters is outside the purview
purview of
of these
these Guidelines
auidelines The circular will
encompass exposure to individual/ joint individual customers only
only.

Implementation of the scheme:

scheme

31 The Gold Loan Scheme shall be implemented through all branches of the
Bank. The branches in the states where this scheme is not presently
implemented would obtain prior approval of their respective Zonal Offices.

3.2
32 Zonal Offices shall implement the scheme in a phased manner after ensuring
provision of proper infrastructure including security and manpower.

3.3
33 For operational and security reasons, Zonal Managers are authorized to
exclude identified branches from the purview of the scheme.

4. Eligibility:

4.1 Any individual owning gold ornaments/ coins, either singly or jointly, who
maintains SB/CD account with the Branch.

4.2 Pawnbrokers,jewelers
4.2 Pawnbrokers, jewelers&Jewellery
&Jewelleryshop
shopowners,Jewel
owners,Jewel appraisers
appraisers and
their close relatives are not
not eligible for gold loan.

4.3 Loans can be granted against gold ornaments/ jewellery and specially minted
pure gold coins sold by our Bank/ other Banks. The weight of the coin(s)
should not exceed 50 grams per customer.

4.4 Gold loans may also be sanctioned to Bank's staff, including staffs posted at
Office and
Zonal Office and Head Office as
Head Office as well
well as
as their
their spouse
spouse (provided
(provided ownership
rests with them) by Branch Managers (except the Branch Manager's spouse)
without seeking prior sanction from Zonal Office. In case of loans to Branch
Manager or spouse of Branch Manager, the ZLCC is delegated to approve
such loans.

4.5
4.5 Loans
Loansto to
staff members/
staff members/their
theirspouses
spousescan
canbe
beextended
extendedat at the
the same
same terms
and conditions as applicable to other customers availing loan against gold.

4.6 The applicantshould

The applicant shouldbebepr.rapert-
p- -oduced
-oc:uced to
to the
the Bank
Bank or his identity and

Ako*I4s•
address should be esta
este./ 11/ g ration card/ identity card/ passport/
40.y.042k. utneetce,a4ceR ble to the Bank.Branches are to
Aadhar card/ similar Ai UtlieEtt6tea6eee
ofs. ensure that all KYC/ • ricrAsI sinIFo4 ed with.
novnT lerf51,conVed with.
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 4 •

Purpose of gold loan:

5.1 Agriculture: Gold loans for meeting crop production expenses and/ or for
creation of assets to be used in farming operation or for allied agricultural
activities like diary, poultry, fisheries, etc., and other agriculture related
activities. The loan amount will be sanctioned based on a declaration by the
borrower.

5.2 Other Priority Sector: Gold loans can also be sanctioned for all eligible
purposes under other priority sectors. Typical requirements under other
priority sector are loans for day to day working capital requirement of business
unit, petty trade, purchase of business tools, furnishing of business premises,
purchase of furniture & fixtures, etc. The loan amount will be sanctioned
based on a declaration by the borrower.

5.3 Non Priority Sector/ Consumption Loan: Gold loan for consumptions purposes
are sanctioned to meet unforeseen expenses/ contingencies/ expenses for
medical treatment/ for marriage and other ceremonies/ expenses for
education/ business needs, etc. The loan amount will be sanctioned based
on a declaration by the borrower.

5.4 Gold loans will not be covered under Credit Guarantee Fund Trust for Micro
and Small Enterprises (CGTMSE) scheme.

6. Assessment of loan amount:

6.1 Limit under gold loans is to be assessed as under:

Loan amount requested by applicant/ assessed amount on declaration;
OR
75% of the appraised value of gold ornaments of 22 carat fineness;
OR
Loan amount assessed based on scale of finance for crop production/ actual
amount of credit requirement for other than crop production, as the case may
be.
Whichever is lower
6.2 Specially minted gold coins sold by any Bank (24 carat fineness) shall be
treated as gold ornaments for loan assessment purpose.

7. Appraisal of gold ornaments and coins:

7.1 The gold ornaments/ coins are to be invariably appraised by gold purity
analyzer machine (x-ray flu ..... e spectrometer) to determine the value
and purity. • k''&- " 41*
--q..2 Wherever gold purity litrkZAP% - .z. is not available, then the gold
ornaments/ coins ar= VD y? Jim( liable ppraised by an approved jewel
UN f
., appraiserto determine 4- v.:4; e, : c ,.u rib,
or
t> sconse-Atimo).
•,_ _
/ HE.P427"
 5

73 An approved jewel appraiser should certify quality, gross weight, net weight,
etc. of the gold ornaments/ coins offered as security. Advance should be
granted only after the Branch Manager/sanctioning authority is satisfied about
the genuineness, quality, weight, etc
etc.,, of the gold ornaments/ coins

7 3
7 Touch stone method and nitric acid test should invariably be applied in order
to ascertain the true nature of ornaments/ coins
coins.

8 Valuation of gold ornaments and coins:

coins:

81
8.1 As a prudential measure, RBI has prescribed a Loan to Value (LTV) ratio of
not exceeding 75% for banks' lending against gold jewellery (including bullet
repayment loans against pledge of gold jewellery). Amount of gold loans
sanctioned should not exceed 75% of the value of ornaments/ coins At
present LTV is 70% of value of Gold (approved by competent authority vide
present LTV
our Memo. No. HO/BU-Rural/SKG/2015-16/143 dated 14.01.2016).

8.2 For the purpose of valuation of gold, it has been decided that gold jewellery
accepted as security/ collateral will have to be valued at the average of the
closing price of 22 and 24 carat gold for the preceding 30 days as quoted by
the India Bullion and Jewellers Association
Association Ltd. (formerly known as Bombay
Bullion Association Ltd.). If the gold is of purity less than 22 carat, the branch
should translate the collateral into 22 carat and value the exact grams of the
collateral.
collateral. In
In other
otherwords,
words, jewellery
jewellery of
of lower
lower purity
purity of
of gold
gold shall be valued
proportionately.

In CBS system, for viewing the present applicable gold rate, a menu has been
developed "GOLDLNRT". The gold rates are updated on weekly basis at
present and subsequently on daily basis by BU-Rural Department. Branches
are advised to use the latest displayed rates while extending credit under the
scheme after deducting the approved margin.

Precautions to be taken while appraisal:

Please refer Annexure-I

10 Maximum amount of loan and delegated authority

10.1 Loan limits:
a) For Agricultural/SME/ Retail purposes:
Minimum: Rs.1.00 Lakh
Maximum: Rs.25.00 Lakh

b) For other purposes:

Maximum: Rs.10.00 Lakh
Lakh

Board ).4 st!reg

1 4 JUN 2015
'111- 5
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 6 ir

10 2 Delegation of powers for sanction of loan against gold ornaments,

Irrespective of category.
Authority Limit
Scale-I Rs 4 00 Lakh
Scale-II Rs.10
Rs 10 00 Lakh
Scale-II! & above Full powers
11 Rate of Interest:
11 1 Gold loan for agriculture purposes:
a) For crop loan/ KCC 9.40`)/0(1Yr.MCLR) +0 30%(BSS)+ 0%(CRP) =9.70%
b) Other than Crop loan/ KCC: 9.40
9.40 %(
%( 1Yr.MCLR)
1Yr.MCLR) +0.30
+0.30 `)/0( `)/0
%( BSS) +0 50 %
(CRP) =10.20%.
11.2 Gold loan for non-agriculture /SME /OPS purposes: 9.40% (1Yr.MCLR)
+0.30% (BSS) +0.50% (CRP) =10 20%.
11.3 Gold loan for other purposes:9.40% (1Yr.MCLR) +0.30% (BSS)+ 2 75%(CRP)
=12.45%

The above interest rates are to be reviewed from time to time. While canvassing
loan proposals, care should be taken to inform competitive rate per month to
prospective borrowers for agriculture gold loans which are not covered under the
Interest Subvention Scheme.
Branches should display the above rates in Branch premises at prominent place
and use other media to circulate these rates in their area for generating new
business under the scheme.
12.
12. Service charges applicable for gold loan:
12.1 No processing charge to be levied for gold loan sanctioned up to limit Rs.1.00
lakh and for sanctioned limit above Rs.1.00 lakh @ Rs.150/- per lakh plus
applicable service tax
12.3 No documentation/ inspection charge to be levied for gold loan.
12.4 No prepayment charge to be levied for gold loan.
12.5 Appraisal charge of Rs.5/- per Rs.1000/- of loan amount, minimum Rs.100/-
with a maximum cap of Rs.500/- per case is to be recovered from the
borrower.

13
13. Type of facility:
Demand Loan/ Term Loan/ Over Draft/ Cash Credit

14.
14. Repayment period for gold loan:

14.1 Principal repayment schedules may be fixed

fixed at
at monthly.
monthly. quarterly,
quarterly: half-yearly,
yearly installments or bullet repayment depending on income generation
and/or seasonality. Interest shall be charged and collected at monthly rests
unless loans are extended for agricultural activities or loans are eligible for
criteria of
of bullet
bullet repayment
repayment for non-agriculturalloans
fornon-agricultural loansasas mentioned
mentioned
hereinafter.
hereinafter. Repayment
Repayment1YP v also be fixed in equated monthly
installments in case of D riqgVA
iva repayable in installments.
% •Grr-it fi
Meedng
Board Meeting
Board
3416-
11 44 JUN 7016
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 7

14 2 For agricultural gold loan repayment period of loan will be as per the
repayment period of KCC The repayment of loan should coincide with
harvesting/ marketing of crops. As regard to agricultural gold loan other than
KCC for agricultural and allied agricultural activities such as dairy, fishery,
piggery, poultry, bee-keeping.
bee-keeping, etc , branches should take into consideration
due dates fixed on the basis of liquidity available with the borrowers and
harvesting/
harvesting/marketing
marketingseason
seasonwhiw_= interest and compounding Ui
cha'a;n2 rroerest
while charging the
same if the loan/ installment becomes overdue For demand loan. loan, repayment
period should be fixed based on the income generation coinciding with
harvest and the marketing
marketing time,
time, total
total period
period not
not exceeding
exceeding 1818months.
months. For
For
term loan, the repayment period of the loan should be fixed in line with the
term loan purposes but not exceeding 3 years, coinciding with the harvesting
and marketing season/ generation of income from the activity Interest is to
be recovered alongwith loan installment in case of agricultural purposes.

14.3
14 3 Loans extended against pledge of gold ornaments/ coins, for other than
agricultural purposes, where both interest and principal are due for payment
at maturity of the loan will be subject to the following additional conditions:
• Maximum amount of loan shall be restricted to Rs.25.00 lakh for priority
sector and Rs.10.00 lakh for non-priority sector purposes respectively.
• The tenor of the loans shall not exceed 12 months from the date of
sanction.
• Interest will be charged to the account at monthly rests and may be
recognized on accrual basis provided the account is classified as
'standard' account. This will also apply to existing loans.
• 'Such loans shall be governed by extant norms pertaining to income
recognition, asset classification and provisioning which shall be applicable
once the principal and interest become overdue.
• InIn this
this connection,
connection, itit is
is also
also clarified
clarified that the LTV of 75% shall be
maintained throughout the tenure of the loan for all loans extended against
pledge of gold ornaments arid jewellery for non-agricultural purposes. The
LTV ratio shall be computed against the total outstanding in the account,
including accrued interest and current value of gold jewellery accepted as
security/ collateral, determined as per the methodology prescribed in our
circular.
14.4 Overdraft/ CaSh Credit Limits: All revolving gold loan accounts and accounts
with maturity of more than one year are subject to renewal at yearly interval.
Maintenance of prescribed minimum margin i e 25% needs to be ensured at
the time of renewal. Drawing Power is to be realigned in running accounts at
the time of renewal. Whenever, Drawing Power is reduced or prescribed
margin is not maintained, either proportionate recovery is to be made or
additional ornaments/ coins/ other acceptable securities or requisite value
have to be pledged so as to maintain the prescribed margin.
Interest will be charged at monthly rests. Interest to be serviced and account
must be brought in credit at least once in 18 months.

14.5 While
14.5 Whilefixing
fixingrepayment
repayment sch -anches
anches may ensure that anticipated
exposure on due date ri
fff) /rt accrued/ other charges does not
exceed present value o coins.
 15. Documentation:

15.1 For limits up to Rs.1.00 Lakh (Demand Loan/Cash Credit/ Over Draft/ Term
Loan)
Documents to be obtained are as under
• Application (Annexure-l)
• Valuation Certificate (Annexure-II)
• Sanction Letter
• Demand Promissory Note.
• L-516
• Unstamped Agreement of Pledge of Gold Ornaments (AG-35)
(Ref:HOBC.100/67 dt.21.07.2006)
• Bearer letter
• Instalment letter

15.2 For limits above Rs.1.00

limits above Rs.1.00 Lakh (Demand Loan/Cash Credit/ Over Draft/Term
Loan),
Documents to be obtained are as under:
• Application (Annexure-l)
Application (Annexure-l)
• ValuationCertificate (Annexure-II)
• Sanction Letter
• Demand Promissory Note.
• L-516
• (AG-35)
Stamped Agreement of Pledge of Gold Ornaments (AG-35)
(Ref:HOBC.100/67 dt.21.07.2006)
• Bearer letter
• Instalment letter

Common documents for

for both
both type
type of
of facilities
facilitiesas
asin
in15.1
15.1 and
and 15.2
15.2

• Declaration from the borrower that the ornaments

ornaments are
are not
not "Stridhan"
"Stridhan"
except in case where wife
wife is
is the borrower
• Composite authority letter to debit the account with charges
• Authority letter for
Authority letter for account
account opening-cum-delivery
opening-cum-delivery of ornaments

16. Disbursement:

16.1 The
16.1 proceedsofofthe
Theproceeds theloan
loanare
areto
tobe
becredited
credited to
to the
the savings
savings account
account of the
borrower.

16.2 In case of cash credit/ overdraft facility, the borrower may be allowed to draw
from the account directly.

16.3 Cheque book facility may be extended to eligible literate borrowers borrowers in
in case
case of
revolving facility.
/ -"----
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tr 17. Insurance: Gold
Gold orn
orn nt&trticIec4/co•
ntsAartic.ler- t/ 40,.pledged
pledged with
with the
the Bank
Bank under
under the
, ,t.. _ scheme are
scheme are covered
covered Alderi, tl?f5 Ge.ne qirritergl‘ Indemnity Insurance Policy of the
(41,
zu it
1 'hiltrl Bank. As such, there i
. lkoW!
W . ,:t obtA ing
obtA. mg a
a separate
separate insurance
insurance cover
cover for
f. L ,a.0'? ., ):_),4
) .. i
,.. these items. \t>t> Kim') smut
sici(ansEcaegiu
\ Z..,_/-p-:(" .;•:,;/ v 4.,,,_-
•..0*.p ;1:11- '<_t "/ hiEi.-
_L :
 Annexure-1

1 Restriction on gold loan:

1 1
1.1 No advance should be granted against gold bar, bullion or primary gold.

1 2
1.2 While granting advance against the security of specially minted gold coins
sold by banks, it should be ensured that the weight of the coin(s) does not
exceed 50 grams per customer and the amount of loan to any customer
against gold ornaments, gold jewellery and gold coins (weighing upto 50
grams) should be within Rs.25.00 lakh for priority sector and Rs.15.00 lakh for
non-priority sector.

1.3. No advance should be granted against pure gold coins which are not sold by
Banks.

1.4 No advance should be granted against gold ornaments/ coins for speculative
or hoarding purposes.

1.5 No advance should be granted against gold ornaments/ coins for further
purchase of gold / jewellery.

1.6 No advance against units of gold Exchange Traded Funds (ETF) and gold
Mutual Funds is permitted, as these products are backed by bullion/ primary
gold.

2. Precautions/ eligibility for engagement/ renewal of jewel appraiser:

2.1 Selection of Valuer/ Goldsmith:

Selection of Valuer/ Goldsmith of professional competence and integrity is

very important for success of the lending scheme. Branches should compile
due diligence report of appraiser on the prescribed proforma(Annexure-
A) and submit the same to their Zonal Office for approval/ renewal. The roles
Scheme
of appraiser are of critical importance in implementing the Gold Loan Scheme.
Due diligence report is to be compiled at branches by at least two officers
including Branch Manager. Zonal Office may nominate suitable officer from
ZO/ other branches in case of absence of second officer. Due diligence
report for appraisers is to be compiled as per the laid down procedures before
their engagement/ review and its updation is to be done on a biennial basis,
preferably in the month of April.

2.2 The valuer should be able to spare time for the bank at mutually agreed days.
A prior undertaking to this effect should be obtained before recommending the
--_-... case of the applicants ;•,.- • •-, -..... lay
ila ycollect
collectapplications
applications from
from valuer/
y F.,,r1rbi .., goldsmith along with .• • em m persons
persons of
of good social standings
,..N•, •e- "'-. '' i
Or v and who are
are known
known tt.!tire
trle BaniveThis
Banlve Firtis
- &I3.
sti. kId
ili Id not
not be
be done
done as
as aa mere
mere formality.
formality.
42
- N. s
- 1 The purpose
The purposeisiseve 4re,s419Azwa:..-$,
eve c4rel
.s
m
sp941,1?9 ta -..,- to toensure that valuer/ goldsmith is
ensure that valuer/ goldsmith
-,;.T.
\ _.,- a manofofintegrity
iii „...,:----
1;:, , ,
integrity an celiia • - nce
iiiitafitbm•-.-nce.
.
/6'.is,‘,1: C.%%": 9 1 :1P
i.)1:;efr;> s-A
-%•O
90.4f+_gvrimou
sor SEELIPSAT
(f o, 14 itri - 31raft•ii.rgri6r7t:.2 *
rm.
";',au-RuRAL
fill-RURAL )1) 4) ►
 10

2 3
2.3 Initially, the period of engagement as a Jewel Appraiser shall be for two years,
with a clause of termination without assigning any reason at the option of the
Bank by giving a 30 days advance notice. Performance will be reviewed on a
biennial basis. Satisfactorily performing jewel appraisers may be allowed to
continue operations for further period of two years each at a time The lead
indicators of performance would be satisfactory performance, no serious audit
irregularities and absence of customer complaints.

2.4
2 4 While reviewing performance of the appraisers, spending habits & change in
liabilities and assets may be ascertained after thorough enquiry with local
residents/ village elders/ village development officers/ village revenue officials,
etc.Performance review report to be kept on record.The satisfactory re-
appraisal/ revaluation report of randomly selected gold ornaments/ coins from
an alternate appraiser is necessary for performance review of the original
appraiser of the gold ornaments/ coins.

2.5 The appraiser should be an Indian national and permanent resident of nearby
area of the branch and well established in his/ her area of operations/ trade/
business/ vocation. Necessary credentials in form of proof of present
business/ establishment/ work done, etc., are to be obtained. The appraiser
should be an existing customer or agreed to become a customer of our Bank.

2.6 The appraiser should be a person with integrity and professional competency.
There should not be any adverse market report about the appraiser or his/ her
vocation.

2.7 The appraiser should not be convicted of any criminal offence and sentenced
to a term of imprisonment in the past. The appraiser should not be debarred
from the empanelment list of any Bank/ Financial Institution in the past due to
breach of contract/ fraud/ malpractice.

2.8 The appraiser should be a skilled goldsmith having minimum 3 years of

experience in the similar line of business. The appraiser should have thorough
know!edge
knowledge and understanding of the industry.

2.9 The appraiser should preferably be an Income Tax Assessee.

2.10 There should be a clear understanding/ undertaking that there would be no

claim for employment by the appraiser whether part time or full time at any
point of time in future. The service of appraiser is purely a matter of contract.

2.11 Credit!financial
2.11 Credit/ financial worthiness•
worthiness - circumstance of the appraiser should
4berfki ,
be logically examined.
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 11
11
I

2 12 The applications fulfilling the above norms may be forwarded to respective

Zonal Offices with specific comments regarding suitability, professional
competence and integrity of the applicants. Cluster of branches may select a
common valuer/ goldsmith
goldsmith depending
depending upon
upon local
local conditions.
conditions Approval of
valuer/ Goldsmith
goldsmith is
is to
to be
be done
done byby the
the Zonal
Zonal Manager as the case may be be.
Care should be taken forfor full
full compliance
compk:nce of identity of the valuer/ goldsmith.
goldsmith,

2 13 The appraiser should be paid the valuation charge @ Rs.5/- per Rs 1000/- of
loan amount, minimum Rs.100/- with a maximum cap of Rs.500/- per case.
The appraiser fee should be recovered from the borrower with the exception
of cases where appraiser exercise is initiated in the standard accounts by the
Bank for the purpose of authentication of original appraisal.

2.14 The approved valuer/ goldsmith should execute an indemnity bond in favour
of the bank with two sureties and also keep an interest bearing deposit with
the Branch as under:

Rural & Semi-Urban Rs .10000/-

Rs.10000/-

Urban Rs.15000/-

Metropolitan Rs.25000/-

The deposit shall not be withdrawn during the retention period of the valuer/
goldsmith and release of the deposits may be subject to the approval of the
Zonal Manager. AA draft
draftof the
of indemnity bond and
the indemnity bondguarantee which is a which
and guarantee
composite document is given in Annexure -B.
composite document is given in Annexure -B.

The indemnity is in a letter form and can be stamped as an agreement

provided no signature is attested by a witness.

3 Introduction of Gold Testing Machine/ Gold Purity Analyzer Machine:

a.
a Our bank has been extending financial assistance against Gold Ornaments
since'
since1976,
976, with
with certain modifications in the scheme from time to time to make
it more competitive.

b.
b. Presently we are using the services of panel valuers/ appraisers for valuina
the gold ornaments.
ornaments. However
However J..= ailability of the valuer is the major issue
while considering
considering thethe G
G. I/s.
Vs. This
This affects
affects the
the TAT and also
accuracy
accuracy of
of purity
purity of
ofGG7. 4.11.5n At es, Bank suffers loss because of
rata%
01M4
fraudulent activities
fraudulent activities co
co milted
rflitted by by some
some \NI vig rsrshaving
havingdoubtful
doubtful integrity.
integrity.
4a- 1 44JIJN 1N 201E 21)1 );"
WOO=
st>:sOmo
aCirdo icCRET;itAr
acnimour
 12

c. Instead of depending on appraisers for valuing the Gold ornaments, we

propose to introduce Gold Purity Analyzer (X-ray fluorescence
spectrometer), which uses the interaction of x-rays with the target material
(ornament/ jewellery) to determine its elemental composition.The machine is
costing approximately Rs.7.00 lakh and proposed to be introduced on pilot
basis in selected branches of our bank especially from NBG-East and NBG-
South, mentioned below, After gathering experience on the performance of
the machine, we may introduce in other Branches dealing with gold loans.

Gold Purity Analyzer Machine has the following advantages:

Knowing the weight and exact purity of the gold ornament to be pledged
within 20-30seconds along with the details of various metals present in the
ornaments;

ii. Purity of the Gold Ornaments is also displayed on the screen of the machine
which the customers themselves will be able to see;

iii. There is no loss of Gold on account of testing as in the case of traditional

methods which is an advantage to the customers:

iv. Reduction of TAT leading to growth in volume of business;

v. Loans can be considered on all the days without depending on the Appraiser;
vi. Appraiser fee shall go into Branch P&L;
vii. Machines do away with the possibility of human manipulation thereby
eliminating pledge of fake gold ornaments and frauds, financing can be
undertaken in accordance with the purity of the gold and thereby protects
Bank's interest.
viii. Warranty period of 15 months from the date of invoice for any manufacturing
defects will be available for the Gold testing Machine.
ix. After warranty period one year service AMC (Annual Maintenance Contract)
without spare charges at free of cost will be provided by the supplier.
e. Cost —Benefit Analysis of Gold Testing Machine:

Income to the branch by way of 6 Loans 6X100X5 Rs.3000/- 1

per day with average limit of Rs.1,00,000/-
(appraiser charges @Rs.51- per Rs.1000/-).
b. Income per month at 5 days/week 22X3000 Rs.66000/-
c. Number months to recover the cost of 700000/66000 10.60
machine Months
The entire cost of the machine shall be recovered from the borrower by
means of valuation (Appraiser's fee) within 10-12 months.
(Economic life of the machine depends on handling of machine/environment
of machine room. Avera -ray tube (which is main component of
the machine) is 100 git 6- I measurement /analysis of gold
ornaments, which is var@f114ertbol years, if the machine is used for
half an hour a day o
available for the mach
yr
z atiord-o er, warranty period of one year is
.011.51-AT *
sicali;R1):
 .13
13
_r
f Demonstration of the machine has been already conducted at our Perur
Branch (Coimbatore Zone) for a period of 2 weeks. Branch is satisfied about
usefulness/ effectiveness of the machine.

q. In view of above, we propose for introduction of Gold Purity Analyzer Machine

for valuing the oold
gold ornaments at selected 50 branches
branches (Annexure-III)
(Annexure-Ill) of
Coimbatore, Chennai and Andhra Pradesh Zones in the first phase The
branches are selected taking into consideration the average monthly gold loan
sanctioned by them. After getting feedback from those branches, we may
introduce the machines at 50 more branches (Annexure-IV) within next six
months. to one year time. At rest other branches, the machine may be
introduced in due course of time.

h. OnOn
installation
installationofofcaratometers
caratometersatatthe
thebranches,
branches, existing
existing GoldGold
ornaments/coins pledged as security should also be tested for its purity over a
period of time, using Caratometers.
The General Operations Department at Head Office will take necessary action
for providing the Gold Purity Analyzer Machines to the Branches.

4. Valuation Certificate:
a) The
a) The gold
gold ornaments/
ornaments/ coins
coins are
are to
to be invariably appraised by gold purity
analyzer machine (x-ray fluorescence spectrometer) to determine the value
and purity. Item/ piece-wise test reports should be obtained from the analyzer
machine. Such test should be done by the officer-in-charge of the department
in presence of another officer/ joint custodian. As per the test report, the
details should be mentioned in the valuation certificate along with the
following particulars is to be signed by the borrower and both the officials of
Bank/ Branch. Valuation certificate as per Annexure-C

i) Name & address of the borrower;

ii) ❑etailed piece-wise description of the articles;
Detailed
iii) Weight of each piece, gross & net;
iv) Fineness of gold in each piece in terms of carat.
b) Wherever the gold purity analyzer machineis not available, the approved
valuer/Goldsmith will test the ornaments for their.gold contents and certify the
value in terms of weight and purity. Based on the certificate, the loan limit
against goidomaments
goidornamentsis isfixed.
fixed. Thevaluation
Thevaluation certificate
certificate (Annexure-
(Annexure-
D)shoufd
D)should contain the following particulars:
i) Name & address of the borrower;
ii) Detailed piece-wise description of the articles;
iii) Weight of each piece, gross & net;
iv) Fineness of gold in each piece in terms of carat.

5. Precautions to be taken while appraisal:

5.1 At the time of "repeat and multiple" loans to a borrower against gold
ornaments/ coins,
ornaments/ coins, the the
apprapprit3;34e performed
e performed byby
a different
a differentappra:ser.
appraiser.
.61 .--rz i a44,,
4
3,- 5.2 The appraisal would orW
srW
d.:13c;
ki34preqe
kilD nrae
D3(.1 M esteng
ce of the Borrower and a Branch
Official and deducti relatin
relatin to to es/ gems weight, wax, foreign
/* 4:(0 '
••,:;,-_
41r' materials, etc., will b 1 1 cjj the, rrower so that the borrower has
lEthe';
16
1,3•:-A -LA VI -
clear understanding o ' tcral- t has been arrived at.
V4.-:` -l
•f ), KAM 3ECRETiPX
KAgi*CREDICAT
c,7.-- At
 14

53 The descriptions of gold ornaments/ coins taken as security should be

recorded in the loan documents. Actual or estimated weight and descriptions
of the stones/ gems or other foreign materials should also be recorded
wherever applications.

5.4
5 4 Only the gold part of the ornaments shall be used for valuation, other metals
and stones/ gems or foreign materials studded on the ornament/ jewellery are
excluded from the valuations. Valuation shall be based on only the intrinsic
value of the gold content therein and no other cost elements (like making/
polishing charges, past/ anticipated tax, value of stones/ gems, etc.) should
be added while valuation.

5.5 It is preferable to perform valuation and appraisal of gold ornaments/ coins

inside the Bank's premises. The appraiser should not have any direct or
indirect interest on the gold ornaments/ coins to be appraised and he/ she
should not be the borrower/ co-borrower or a close relative/ close
acquaintance of the borrower/ co-borrower.

5.6 Preference shall be given for Hallmarked ornaments/ jewellery. Preferential

treatment of hallmarked jewellery is likely to encourage practice of hallmarking
which will be in the long-term interest of consumer, lenders and the industry.
industry

5.7 If a customer wants to pledge multiple numbers of similar items which are all
new, Branch should enquire about the source of that gold ornaments/ coins.
Skilled people like goldsmith can manufacture items with lower content of gold
which may not be easily detected.

5.8 When a customer comes to a Branch from distant areas, genuineness of

pledge request is to be ascertained. The justified reasons for not pledging at
branches nearer to their home should be obtained.

5.9. Special attention should be given when a customer, particularly younger

generation apprdach with large quantities of gold. Necessary enquiries
should be made to determine the genuineness and authenticity of such
pledge request.

5.10 When a customer comes to the branch with broken jewellery/ ornaments,
branch officials should be alert to the possibility of theft in the ownership/
possession of such gold. Gold ornaments/ jewellery may be broken in the
course of theft or snatching.

5.11
5.11 Special
Specialcare
care should
should be
betakes
tak iecking purity of gold to be pledged by
the customers
the customerswhowho apapp AtiVu k hours of business for maximum
•
possible loan
possible loanamoun
amoun Athsca-d larflaint- at things
at things
bebe done
doneall
allat
at once.
once.
Branches should hand nly priNglitig
niy prg.. lo-; customer
hig?dg lo customer at
at a
a time.
4;10441=
'VOW MI 4
t> 144:Watt
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-NW
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•-•
 15

5 12 The conduct of branch officials should be thoroughly professional, conveying

an impression to customers that they are not in a position to compromise on
the guidelines of the Bank. This will discourage potential fraudsters to target
our branches.

5 13 An honest customer typically pledges oenuine

cenuine gold. Hence, appraisal of
customer is equally important to detect spurious gold. In other words,
branches should also look beyond gold to appraise gold. The identity of
customer, his/her credit worthiness, family circumstance, reasonableness of
gold ornaments in his/ her possession, etc. shall be logically looked into
before grant of a loan.

5.14 As a rule, gold once appraised should not be handed back to customer, If at
all it happens, the gold received back must be reappraised before the
customer leaves the branch.

5.15 Branches would selectively finance borrower who want loan less than 50% of
the value of gold pledged. In such cases, request may be considered only if
the sanctioning authority is convinced that the borrower is not seeking gold
loan for nominal amount just to keep jewels in the safe custody of the Bank.

5.16 Branches should not entertain request of customers for loan against gold bar/
biscuit, bullion or primary gold or gold loan for further purchase of gold/
jewellery.

5.17 Branches should not entertain request of loan against gold ornaments/
jewellery/ coins over which pawner does not have ownership. It is not
advisable to make advances against re-pledge of ornaments as this facility is
likely to be misused for financing money lenders. If original purchase invoice
is available, customers may submit a copy of the original invoice at the time of
borrowing.

5.18 For advance against gold belonging to wife as 'Stridhan', wife of the borrower
should also be made a co-borrower. A declaration should be obtained from
the borrower stating that the ornaments/ coins are not 'Stridhan' except in the
case where wife herself is the borrower.

5.19 When gold ornaments/

ornaments; coins bearing initials or other marks which are prima
facie not those of the borrowers are accepted as security for loans, branch
officials should fully satisfy themselves about the bonafide ownership.

5.20 Branches Branches should

should ensure
ensure th th ' ctronic weighing
'-ctronic weighing machines,
machines, weighing
scales and metric weight from the Government Weights and
------. 4...._,
. .-.,%. ,--ticr Measurements Depart art to te is within its validity.
A
if .r.`":" Ff7
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 16

5.21 Branches should avoid granting loans against jewellery with stone weight or
more than 40% and jewellery of temple/ church/ gold statue/ other exotic
jewellery not usually purchased by Indian households. Finance against
bullion or primary gold is prohibited. Specially minted gold coins (24 carat
purity) sold by banks shall be treated as gold ornaments for loan assessment
purposes. Weight of such gold coin(s) should not exceed 50 ams per
customer. Finance against other types of gold coins is prohibited.

5.22 The terms and conditions on the reverse of appraiser's valuation report should
be explained to the borrower and his signature is to be obtained in token of
understanding the facts. The borrower may be issued with an
acknowledgement in respect of the gold ornaments/ coins pledged to the
Bank by way of issuing a duplicate copy of appraiser's valuation on obtaining
his/ her signature on the original. This should be surrendered to the Bank at
the time of receiving back the ornaments/ coins on adjustment of loan.

f t LCIII
- .4*
Bli-

C.k b `iCt

41i/rca‘
Board Meeting
ti
h9
14 JUN 2015

WARD SECREARALe

•
 17

Annexure-II
Prevention of fraudulent activities by appraiser:
11 Of late, due to over-dependence on jewel appraiser by some branch officials,
a few incidences of frauds have emerged in the segment Usually, dishonest
jewel appraiser commits frauds by certifyina
certifying spurious or low quality jewel as
authentic one. Incidence of frauds by jewel appraiser is a recurring one
cne and a
growing problem across the gold loan industry. Consequently, meticulous
compliance of the existing systems and procedures is critical to avert such
kinds of frauds.

1.2 Branch Manager should be vigilant while accepting gold to prevent fraudulent
activities by unscrupulous appraisers by certifying spurious gold ornaments/
coins as authentic or inflating valuation. Branches should exercise caution
while sanctioning loan appraised by appraisers who are in financial difficulties
as they are more prone to such fraudulent activities.

1 33 The
The
Branches
Branches may
mayengage
engagenot
notless
lessthan
thantwo
twoindependent
independent appraisers
appraisers (Panel
appraiser of other branches can be engaged). No individual other than the
panel appraisers should be permitted to appraise jewels. The panel
appraisers are not permitted to delegate their duty/ responsibility to another
person.

1.4
1 4 If the loan applicant is a close relative or close acquaintance of the appraiser,
the branch official should deny the loan unless arrangement of alternate
appraiser is made. The branch officials should make discreet enquiries to
satisfy themselves about the absence of potential conflict of interest.
Unscrupulous appraisers often engage family members and friends as proxy
borrowers to commit frauds.

1.5 Upon
Upon appraisal of jewels, the same should be taken under custody
immediately by the Manager/ Officer-in-charge and in no circumstances,
jewels or other documents pertaining to gold loan should be left with the
custody of the panel appraiser.

1.6 All gold loan customers should meet the Manager/ Officer-in-charge directly
before pledging the jewels. The panel appraiser should never canvass for
gold loans unless authorized in writing by the Branch Manager. It should be
ensured that in no case, customer shall approach the appraiser directly or
vice-versa.

1.7 Due care is to be exercised on the customers who are availing gold loan
frequently and the customers introduced by the panel appraisers. The seating
arrangement of the Officer-in-charge should be appropriate for proper
supervision/ overseeing the syy the panel appraiser
appraiser.
411-41.I8-44(/8141
1.8 The panel appraiser
appraiser sh
sh • cr9kiutt th4-,
ca t praisal within the Bank's premises
e
in the
the presence
presenceofofthe
theegFroviieY'al
t p-rroa61'
9 Trin
-rcrb 154 ch
b ch official.
official.The
Theservices
services ofof panel
panel
appraisers on
on the
the pan-:-rLit#I4-11ted
pan * r tialutilaed 4.) the the limitedpurpose
limited purposeof ofappraising
appraising
-fr
jewels and under no grOie‘th!, thz, i.hould
hould be be asked
asked to
to attend
attend to any
other work either incide f'.42 f to, the sanction of gold loans.
- u ley
eixv
 18

19 The panel appraisers should be strictly utilized for the work entrusted to them
and not for any other work. The panel appraisers are not permitted to handle
cash on behalf of the customers or the Bank. Under no circumstance, the
appraiser shall be permitted to participate/ assist in the transactions between
the Bank and its customers
customers.

2. Physical securities of gold ornaments and coins:

21 Loss of gold ornaments/ coins due to robbery/ burglary has wider implications,
making servicing/ settlement of these loan accounts complicated.complicated
Considering the law and order situation, appropriate security arrangements
should be in place to protect the pledged gold in the branches.

2.2 If a branch has more than 100 packets of gold ornaments / coins, separate
safe should be provided for the purpose of safe custody of the same.

2.3 In case, if the accounts are less than 100, gold ornaments/ coins should be
kept in a separate shelf exclusively provided for the purpose inside the Cash
Safe and the key of this shelf should be in the personal custody of the Branch
Manager or a designated officer. If such exclusive shelves are not adequate,
all gold ornaments/ coins should be kept in a separate safe.

2.4 Gold safes should not be kept in the open hall but inside the safe/ strong
room.

2.5 To avoid misappropriation/ mishandling/ fraudulent practices by the staffs

handling the gold loan portfolio, a periodical physical verification of gold
packets should be undertaken. A quarterly physical counting of gold packets
and a proper record of such verification must be maintained by the branches.
The visiting officials from controlling offices should test check maintenance of
such records. It should be covered in the regular monthly test checks
conducted in the Branch.

2 The
.6 The
2.6 Zonal
Zonal SecurityOfficer
Security Officershould
shouldinspect
inspectall
allbranches
branches having
having gold
ornaments/ coins of Rs.50.00 Iakh
lakh and above to satisfy the security aspect
and safe keeping of gold ornaments/ coins.

3. Joint custody and role of joint custodians in safe keeping:

3.1 All gold ornaments/ coins against which advances are made should be kept
under the joint custody of Branch Manager/ Designated Officer and Head
C.;ashier/ Cashier-in-charge/ •
Cashier/ Cashier-in-charge/ - the case may be.
41S-Zir
.esza
Branches
Brancheswherewheretwotwo r ricr .tQt7a,q42' e posted and a separate safe is
PecirtcArE2
' provided
provided for
for safe
safe cust
oust / gr / /coins,
coins,ititshall
shallbe
be kept
kept under
under the
()
of90M91Nomn o m1
joint custody of two o \Jam
0,TA
\Se?. ;OAPIMiititEDRIAT
sawn CRET;RLAT
Het,c ,V
 19

3.3 If two or more officers are not posted in the Branch and only one officer is
available due to leave/ absence of other officers and a separate safe is
provided for safe custody of gold ornaments/ coins, an Officer and Head
Cashier/ Cashier-in-charge/ Special Assistant shall be the Joint Custodians.
However, as soon as any second officer joins/ resumes duty, gold ornaments/
coins to be kept under the joint custody of two officers

34
3.4 If gold ornaments/ coins are kept inside the Cash Safe, then an Officer and
Head Cashier/ Cashier-in-charge shall be the joint custodians, irrespective of
number of officers posted in the Branch.

3.5 The gold ornaments/

The gold ornaments/ coinscoins along
along with
with one
one copy
copy of
of valuation
valuation certificate
certificate
pertaining to
to each account should
should be put in a small cloth
cloth bag in the presence
of custodian/s
custodian/s and a tag carrying the loan account number and address of the
borrower should
should bebe tied
tied around
around the
the bag and sealed with lac (sealing wax) with
seal on
bank seal on it.
it. Another
Another copy
copy of
of such
such slip
slip should be kept with
with the security
security
documents.

3.6 Roles of Joint Custodians at the time of acceptance

acceptance ofof gold
gold ornaments/ coins
coins
under:
are as under:
• The quantity
quantity and number of items as per the appraiser's
appraiser's report and the
sanction letter shall be verified.
gold ornaments/ coins shall
• The gold shall be packed in their presence and the
packet shall be sealed in their presence.
• It should be ensured that the packing
packing containing
containing the gold ornaments/ coins
is deposited inside the safe.
• Entry will
will be
be made in the safe-in and safe-out register register under dual
signature.

3.7 Roles of Joint Custodians during the safe custody

custody of gold ornaments/ coins
are
as under:
The packets
• The packets should
should be
be periodically
periodically counted and tallied with the balance in
safe-in and safe-out register.
• The officials should look
The officials look for
for any
any tampering of the packets and if if found
tampered, investigate thoroughly.
tampered, investigate thoroughly.
• All packets should be kept in the safe by arranging them in trays as per the
serial numbers or in any other convenient way so as to locate them easily
at the time ofof delivery of gold ornaments/ coins to the beneficiaries on
adjustment of the loan.

4. Delivery of ornaments he borrower:

46:1
•.4.1 Joint Custodians sha rg%retillttle delivery of ornaments/ coins to the
r
C. borrower. The deliv .• Id tilottY6311 ensured only after full adjustment
of the loan/ advance PIAT, delivery of ornaments/ coins
coins is to
be done in the presenc 6t se. • 6', /

7
.1
 20

4.2 When the loan amount is completely adjusted and ornaments/ coins are
delivered back, borrower's discharge/ acknowledgement should be obtained
on the pledge form at required place or in the register below the sentence
"Received the gold ornaments/ coins pledged by me/ us which are complete
and in order".

4.3 Delivery of ornaments/ coins to a third party, who must be identified, may be
made on repayment of loan only in very exceptional circumstances and on
undoubted authority of the borrower. The letter of authority should contain an
undertaking by the borrower absolving the Bank from responsibility in the
event of dispute or loss arising from the delivery of ornaments/ coins to the
party named therein. If necessary, the undertaking may be taken in the form
of indemnity bond. The receipt of third party will be taken on the letter of
authority as well as in the Gold Loan register. The borrower should be
advised separately of the delivery of the ornaments/ coins to the third party
and requested to send to the Bank an acknowledgement, which should be
sent to him alongwith the request letter. On receipt of the acknowledgement,
necessary remarks should be made in the Gold Loan Register. The Letter of
Authority; Indemnity Bond and the acknowledgement, when received, should
be filed in a separate file and retained for record.

4.4 Only in exceptional circumstances, on written request of the borrower, part

delivery of ornaments/ coins may be given against part repayment of the loan,
provided the advance value of the ornaments still in the Bank's possession
fully covers the outstanding in the account plus margin.The borrower's
acknowledgement for receipt of ornaments delivered to him should be
obtained.

4.5 The delivery of gold ornaments/ coins pertaining to the account of a deceased
is subject to the settlement of death claim, even if the loan is liquidated by the
heirs.
• KYC formalities of all legal heirs/ executants of the documents i.e.
Indemnity, Affidavit, letter of disclaimer, etc., to be fulfilled to avoid any
wrongful delivery of ornaments/ disputes at a later stage.
• Interest in the account of the deceased borrower should be charged as per
the contracted rate in the usual manner.
• If the legal heir/ near relatives wish to liquidate the outstanding in the gold
loan account, they can be permitted to do so by giving them clear
understanding that the ornaments/ coins would be delivered to the legal
heirs on production of legal representation in the proper way only and that
the amount so deposited would not be refunded to them in case they fai! to
obtain legal representation in their favour. A letter of undertaking to this
effect must be obtained and kept on record.
• The ornaments/ coins will be delivered to the legal heirs on production of
the legal representati • -ripleting the Bank's formalities with
regard to delivery *69.4.46' coins in lieu of the proper legal
representation. I fhe statt&,,t-aset. e person(s) liquidating the loan
:3
account should b -Irn de ttgNsigni tE etter of indemnity as one of the
sureties.
s2sEvErgur
44 ci
•
 21

• Pending completion of the formalities/ production of the legal

representation and delivery, the gold ornaments/ coins should be held as
safe deposit article.
article
• Documents which are required to be submitted alongwith the claim form
i) Proof of death of the borrower:
borrower;
ii) Proof of identification and proof of address of the legal heirs/
sureties as the case may be, such as election ID card, Pancard,
Passport, etc. and proof of authority of legal heirs wherever
applicable;
iii) Indemnity/ Legal Representation wherever applicable.

•• Authority for redemption:

In terms of Branch Circular No.91/120 dated 71h 7th October, 1997, under
mentioned authorities will have the following powers for redeeming gold
ornaments to the legal heirs of the deceased borrower against suitable
indemnity irrespective of whether the succession certificate of legal
representation has been obtained or not.
Authority Value of pledge gold ornaments as
per the latest value
Branch Manager- Small Branch Rs.10,000/-
Branch Manager- Medium Branch Rs.25,000/-
Branch Manager- Large Branch
Manager- Large Rs.50,000/-
Branch
Branch Manager-
Manager- Very Large Rs.1,00,000/-
Very Large
Branch
Asst. General Manager and above Full powers
(Branch/ Zonal Office)

4.6 If acknowledgement is lost, pledge articles can be returned to the borrower

after obtaining "No claim letter"
letter" from
from the
the borrower.
borrower. Further,
Further, at the time of
return, usual procedures for
for identification of borrower shall
shall be followed. It
should be ensured that articles are returned only to borrowers or his/ her legal
heir against proper acknowledgement and only after identity is proved beyond
doubt.

4.7 If the borrower has other irregular loans/ advances or other debts due to the
Bank as a borrower or as a guarantor or in any manner, unless and until such
regularized by the borrower, the ornaments/ coins pledged under
debts are regularized
the gold loan will continue to
will continue to act
act as
as a security for
for all
all such
such debts
debts even
even after
liquidation of the gold loan.

5. Inspection by Internal Auditors:

5.1 The Internal Auditors while conducting Branch Inspection should verify and
comment on: --- ----__
• Number
Number of ofbags
bagstall'
tali • .-z-4
--7-'14 utstanding
lgleek3•utstanding
• Number of loan intt3Voicifinforn
rrittnripielo.gor4 ents/ coins accounts verified (to
indicate loan ace
acc umbfAs gip) V.
urnIN&s2E0°) 5-
-i, • Any
Anyvisible
visible tampe
tampe Oftlylpc or absence of sealing procedure
• Details of missing p fRfftictA.T
 22

6. Maintenance of Gold Loan Register

6.1 A Gold Loan Register should be maintained by the branch which should
contain the following particulars:
• Gold Loan Account Number
• Name of the borrower with Father's/ Husband's Name
• Address with Telephone/ Mobile No.
• Purpose of Loan
• Net Weight of Gold (gms)
• Date of sanction
• Sanctioned loan amount
• Date of lodgment
• Gold delivered date
• Signature of borrower
• Initials of key holding officers.

7. Diligence in obtaining and maintaining security:

7.1 Branches sanctioning gold loans should randomly select 10% of the existing
gold loan securities (subject to maximum 100 accounts) in regular accounts in
all existing gold loan securities in irregular/ suspicious accounts and get them
re-appraised by second appraiser every year, preferably during the month of
January/ February when there is lull in sanction of loans.

Next year, 10% of the re-appraised securities of the previous year and 10% of
the existing gold loans (fresh gold loan securities + remaining 90% of old gold
loan securities), randomly
randomly selected
selected (subject
(subject to
to maximum
maximum 100
100 accounts) in
regular accounts and all existing gold loan securities in irregular/ suspicious
accounts have to be got re-appraised by a third appraiser from some nearby
Branch.

This process has to be continued each year so that any suspicious

transaction could be identified in time. Any empanelled appraiser who has
neither appraised the randomly selected ornaments/ coins at the time of
sanction nor subsequent re-appraisal for authentication of original appraisal of
those specific selected ornaments/ coins is eligible for performing this
exercise.
7.2 Branches have to prepare a certificate under the signature of the joint
custodians every year of having got the securities re-appraised/ revalued by
other than the original appraiser and hold it on record for verification by the
Auditors (Annexure-J).The Zonal Heads should ensure that the above
instructions are put in pL ' d z, r-s! theyvisit
I t, they visitthe
thebranches,
branches, they
they have
have to
45taP
verify the
the certificates
certificatesaakitfatisft9( ala-au tttlzuthenticity
*tisk( Ab-su 4:4 authenticityofofsecurities.
securities.
Board Meeting
T1- Board Me,,dng

The re-appraisal as in.1 I l a9s t te got done in the presence of the

gold loan borrowers, fo'
fo lee sent
sent by
by the
the branch.
KAM SEMETRAI
•
 23

8 Post
Post Sanction
SanctionMonitoring:
Monitoring:

8.1
81 The borrower shall maintain a minimum margin of 25% on gold ornaments/
coins during currency of the loan The Loan to Value (LTV) ratio should not
exceed 75%

82
8.2 Close monitoring of market rates of gold should be ensured. If margin is
reduced due to downward fluctuation of price of gold or upward movement of
rate of interest or accrual of interest or overdrawing/ irregularity, the Branch
Manager may demand repayment or additional security to cover the minimum
margin of 25% with one week's notice.

8.3 Advance will be recalled, when (i) the loan is not paid on due date or (ii)the
value of the gold is less than the outstanding or (iii)the account becomes NPA
or (iv)the account continues to remain irregular for more than 30 days after
intimation of irregularity by the Branch. If an account turns irregular, a letter
should immediately be sent to the borrower requesting him/ her to deposit the
overdue amount to regularize the account. If the borrower fails to regularize
the account and it continues to be irregular, advance should be recalled.

9. Auctioning
Auctioning of of
ornaments and coins:
ornaments and coins:

9.1 When an advance has been recalled and repayment is still not forthcoming,
the Bank has the right to sell the gold ornaments/ coins pledged, after giving
reasonable notice to the borrowers (vide Section 176 of the Indian Contract
Act). If the account is not put in order within the time stated in the notice, the
ornaments/ coins should be put up for auction with the prior approval of the
Zonal Office (specimen
(specimenofof memomemoin in
Annexure-I)
Annexure-I)in accordance with the
procedure described below.

9.2 If the loan is not paid on due date or the account is turned to NPA or
persistent irregularity is not rectified or shortfall in security coverage is not
replenished, a recall notice to the borrower giving 30 days time to repay the
loan should be sent(Annexure-E).

9.3 If there is no response even after 30 days of recall notice, another notice to
the borrower giving 15 days time should be sent by registered post with
acknowledgement due informing about auctioning of gold in case of failure of
adjustment of loan on the date mentioned in the notice (Annexure-F).
(Annexure-F).

9.4 The notice of demand is to be delivered to the borrower in person or sent by

post/
post! courier properly to the iven on the application or to the latest
address available
available in
in the
the/ COP stal acknowledgement of the notice
irik\
/ •
and the postal cover r- tuirM4Xii
tufclalarr -40 -' red
i,14 red should be carefully preserved
unopened. /JP
4,
469-,- 1. 4
4 JUN ZO2016
0,91hUt1
T 34
zt; Z1APD ieut-ma
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2/
,,,,Qt/Heti?>7
 24

9.5 If the loan is not paid on a demand notice being made, the gold ornaments/
coins pledged will be sold in public auction. The Bank shall have right to
recover from the borrower the balance due if any, after sale of the pledged
gold.
96 The list of defaulters of overdue/ irregular gold loan accounts who have not
responded even to registered notice is to be sent to the Zonal Office aivino giving
particulars like name and address of borrower, loan account number, date
and amount of loan sanctioned, net weight of gold ornaments, loan
outstanding, action taken, etc., for seeking permission for auctioning of the
gold pledged by the defaulters.
9.7 Conduct
9.7 Conduct of of the
the auction
auction proceedings
proceedings shall be announced
announced through
through
advertisement in in two
two newspapers
newspapers — one in vernacular and the second in a
daily at
national daily at least
least 15 calendar days before the scheduled auction date
informing the
informing the date,
date, time and place of auction and relevant sites of National
Informatics Centre
Informatics Centre by the Zonal Office. TheThe list
list of accounts taken up for
auction shall
auction shall be
be displayed
displayed atat the
the concerned
concerned branch
branch forfor atleast
atleast 15
15 calendar
days before scheduled date of auction. Sale Sale notice
notice is to be sent to the
borrower informing
informing time time and
and venue of action of gold ornaments/ coins
(Annexure-H).
9.8 Gold ornaments/ coins have to be auctioned in the presence of gold appraiser
and two good witnesses of that locality and shall be taken up on as-is-where-
is basis as far as possible. The auction should be conducted in the same
town or taluka in which the branch that has extended the loan is located.
9.9 The gold ornaments/ coins pertaining to different gold loan accounts should
be auctioned separately. Reasonable opportunity should be given to all
borrowers to redeem
redeem thethe gold
gold ornaments/
ornaments/ coins
coins to
to avoid auction of the gold.

9.10 Care
9.10 Careshould
should be
be taken
taken that
that bid
bid amount
amount should
should not be less than the amount to
be recovered as
as per
per the
the account,
account, publication
publication charges and tax on auction (as
per applicable rules) etc. Every effort should
should be
be made to realize the full
the full
market value of the security pledged. A reasonable minimum reserve price
for each
must be fixed for each ornament/
ornament] coin
coin depending on the appraiser's report
and the current market price and the bidding must start from this amount.
While auctioning the gold, the branches
add, the branches should
should declare a reserve price for the
pledged ornaments/ coins. The reserve price for the pledged ornaments
should not be less than 85% of the previous 30 days average closing price of
22 carat gold (24 carat for coins) as available in the Bank's site and value of
the jewellery of lower purity, if found in terms of carats should be
proportionately reduced.

9.11 After appropriating the auction amount to the loan account and after meeting
all related balance is
expenses, if any balance
related expenses, is left,
left, itit should
should be refunded to the
borrower
borrower by by way
way of
of aa P errand Draft/Drafti Credit
Credit in
in the
the account,
account,
provided the Bank is *au er claim against the borrower. Full
details of the value cNeuti ?irr tithe -- ction, the outstanding
outstanding dues and
associated cost ad La ElicN try ount
ount over
over and above the loan
outstanding should liqosth ❑rrower shall
orrower shall be reported to the
borrower. aawmsEcRumex
 25

9.12 A brief
9.12 A brief summary
summary ofof the
the circumstances
circumstances leading to the sale, details of the
auction
auction proceedings,
proceedings, the
the name
name of the highest bidder,
bidder, the
the amount
amount realized and
the manner in which itit has been disposed off, should
should bebe recorded
recorded in
in duplicate
duplicate
and witnessed by as many of the disinterested persons present at the auction
as possible. A copy of the recorded note should be forwarded to the
Controlling Authority for information.

9.13 A receipt
9.13 A receipt for
for the
the sold
sold ornaments/
ornaments/ coins
coins should be obtained from the
successful
successful bidder
bidder in
in the
the Gold
Gold Loan
Loan Register
Register and
and also
also on
on aa separate sheet of
preserved alongwith
paper and preserved alongwith other documents/ papers of the account.

Kanchankrural
Kanchan1ruralcl1NS \Note-Gold Loan-2016
d1NS1Note-Gold

It

ka-w
kaw
8oara M
Bosco easinq
Meeting

w r--‘44 JUN
Ar
4 JUN ME
EU 55:
*
;
*V AMiy
V> Bow) sEc:0,el
 t.
26

ANNEXURE (A)

BANK OF INDIA
BRANCH

Due Diligence report on Jewel Appraiser

Part A:
Sr. Particulars Details
No.
1 Date of inspection .
2 Name and address of the
appraiser
Tel (Resi.)
Mobile.
3 Age of appraiser
4 Whether belongs to community of
goldsmiths?
5 Location of the shop if any and
value of paid up stock
6 Experience of appraiser in the
said line of activity
7 Market reputation of the proposed
appraiser -1
-,
7a Whether already working as an
appraiser with other banks?
7b Worth & Basis of worth (Rs. in
Iakhs)
lakhs)
8 Present income of appraiser and Sources of Income Amount (Rs. per annum)
the sources Business Income
Appraiser charges from •
other Banks (if anv)
any)
Others (specify)
Total
9 Details of dependents
dependentsother
other than
than Name of the Relation-
Relatidh- Age Annual income
Annual income
spouse family ship • of the
members dependents if
any
a ny (Rs.)
, _,_

10 Details of assets owned by Nature of the No. Value Encumbered/

appraiser assets (in Rs.) not
encumbered
Land!Plot
ilandl Plot
House
Others (pl.
specify)
_ Total _
--.i /: —Amount
Purpose r Date Amount
11 i- Details of borrowings from c
c• .1
m...
,:,
- Present
Present . Over-
o 7'77
'7i! of loan of of loan outstanding dues,
society/ banks and other xai hiiesnkP
is igs,ritcP loan (Rs.) (Rs.) if any
faar d as
Board nq
e•Vfne
el\
h9
A9
'A71rr JU /IM
1 il4 JIA 711I
1;4 1 /. CI
12
12L Means of appraiser
appraiser (in
(in R „t ,',4, ' /FrlitaT
4r,711 aPb-

• •• '.r HeiaS,1,/
".•31
,_.
 27

Part B:B:
Part Due Diligence:
Due Diligence:
S.No. 1
S.No. Particulars
Particulars Details
Details
1 Independent enquiries made with
for KYC norms

2 Name and address

address of
of Gerson
person
contacted

3 Whether related to appraiser?

4 . Since when he know the

appraiser?

5 How long
How long the
theappraiser is staying
appraiser is staying
at the given address?

6 Opinion/ views gathered

Part C: Particulars of Sureties

_.
1 Name ofof the Surety 1) 2)
2 Worth ERs.
(Rs. in
in lakhs)
lakhs1
3 Basis of worth
4 Address

5 Occupation
6 Type of account with us
Since
7 Due diligence report complied Name P.F.
P.F.No.
No.
by
1)
1)
2)
2)

Part D:D:
Part Remarks andand
Remarks Recommendations
Recommendations

Name and signature

Name signatureof Credit Manager/
of Credit Name and signature
Manager/ Name signatureof Branch Manager
of Branch Manage
Officer
Officer

spa h4erl

16:

oom
1 4 JUN 2015
 28

ANNEXURE (B)

BANK OF INDIA
BRANCH Date:
Date

Dear Sir,

Your advances
Your advancesagainst the pledge
against of goldof
the pledge ornaments/articles
gold ornaments/articles
My/our
My/ourAppointment
Appointmentas as
the the
gold tester
gold tester

You have appointed me/us as the person/s to test, determine and certify the fineness
and the value of the gold ornaments/ articles against the pledge of which you will be granting
loans or other advances facilities to your borrowers and I/VVe have agreed to accept by way
of remuneration of my/our services Rs.51- per Rs.1000/- loan minimum Rs.100/- and
Maximum Rs.5001-
Rs.500/- per
per case
case of valuation.

2. In consideration of the premises, I/we so as to bind myself/ ourselves and my/our

executors, administrators estates and effects jointly and severally undertake and agree with
you, your successors and assigns as follows:

(a) To indemnity and keep you safe and andindemnified

indemnified againstall
against ail claims,
claims, demands,
demands,
actions, proceedings, loss, damages, liabilities, costs charges and expenses which
may be made or brought or commenced against you or be paid, sustained, incurred
or suffered by you as a consequence direct or indirect of your appointing me/us as
the tester as aforesaid for the valuation and certification of the articles and or your
relying on such certification and valuation and without prejudice to the generally of
the foregoing of any of the articles/ found to be not of the fineness of value as
certified by me/us;

(b) To pay to you on demand the amount of any such loss, damage, liability, costs,
charges and expenses together with interest at %p.a. from the date of payment
by you until reimbursement by us.

(c) That you shall be at liberty to appropriate the sum of Rs. (Rupees
) or any part thereof deposited by me/us
with you towards my/our liability hereunder, without prejudice to your right of
recovering the amount of such liability if any in excess of Rs. (Rupees
).

_------
/
4-
-111

emud MeetIng
Baird Meelfig

AV 1 4 JUN
JUN2015
2016
0,191.1) ifty
WPIJIOCt 6ocr
sCan inartlau
 29

3. It has been agreed between

between me/us
me/us and
and you
you that
that either/
either/ any of
of us may determine the
relating to my our appointment as
Agreement relating as the
the tester
tester byby giving
giving one
one month's
month's previous
notice to the other in writing provided that my/our liability hereunder shall not be extinguished
until all the advances in respect of which my/our valuation and certification were obtained
have been fully recovered by you.

faithfully,
Yours faithfully,

(TESTER)

In consideration
consideration of
of premises,
premises, I/we the undersigned -

(i)
(i) _

(ii)

jointly and
jointly and severally guarantee to Bank of India the performance
performance of
of all
all the
the obligations
obligations and the
aforesaid indemnity
payment of all moneys due under the aforesaid indemnity by the executants/s thereof.

(SURETIES)

Board 8.14,,t)

Board Meeting

Aw 1 44 JUN
JOr 1 JUN 2015
201S 5

\\* acmoTI
100 1,1E -Diac
i
54:10 SECREARMI
t4.
 30

ANNEXURE (C)

BANK OF INDIA
BRANCH

Shri/Smt.
SO/WO

Address:

Valuation by Gold purity analyzer machine

Sr Description of Gross % of
r% of Net 1 Current Current Remarks
ornaments/ weight purity in weight 1 Rate per value
articles (in carats (in gram (Rs)
grams) grams) (Rs) (5x6)
1 2 3 4 5 6 7 8

We have weighed and tested the gold ornaments by the gold purity analyzer machine in the
presence of the applicant/ borrower.

Signature of Officer Signature of Credit Officer/ Br. Manager

Date:

The gold ornaments are weighed and tested in the gold purity analyzer machine in my

-I
presence and I have agreed to the contents stated above
above.

ri
A Applicant's/ Borrower's signature

(
e 13oircl Meettng %.

C
fF 0
1 2, JUN 201&
y
4Wr

IVOIPMIT
st> 9800Dicart6,rre
• zs.
 31

ANNEXURE (D)

The Branch Manager.

Manager,
Bank of India.
Branch

Sir,
The details as to purity, weight and value of various gold ornaments/ articles provided
by Shri/Smt. S.0/
S. 0/
W.0
Address:

for valuation as under:

Sr Description of Gross % of
% of Net 1 Current
Current Current Remarks
ornaments/ weight(in purity in weight Rate per value
articles grams) carats (in gram (Rs)
grams) (Rs) (5x6)
1 2 3 4 5 6 7 8

I, Shri hereby
hereby state
state that the detailed as
above are
certified above arecorrect
correcttoto the
the best
best of
of my
my knowledge
knowledge and
andbelief.
belief. In
In the
the event
event of
of any
inconsistency
inconsistency in
in my
my certificate
certificate as
as above and due to
to which
which if Bank suffers/ incurs any loss.
the same will be reimbursed by me to the bank without any demur and condition(s).

Date: Sianature
Signature of
of approved valuer!
valuer/ Goldsmith

1, Shri have read and agreed to the

haVe
contents of the above certificate.

Date: Applicant's signature

Countersigned
Countersigned by by the
the Branch
BranchMan..4
Man 4 -- 4xeda,1
--k7reti4l ger
ger:
Qt k-a- c2A Ox.
(Valuation
(Valuation certificate
certificate to
tobe prep e inetiriptitateis-
beprep. intriplatens- olio opy opy to
to be
be kept with
with the ornament
bag, one with the loan docume and 9rimotWo
bag; one with the loan docume eand trisuRoffEto ( 13 V
1§ftiven
iventotothe
the borrower)
borrower)
c9
„.....„,
•
A icircire,
ItYtirte.,
lifq-‹-,,-4
P.1*<K11:1
\ it>:4aon sEvEtiaur
\\\
i--t."
Wit,
 32

ANNEXURE (E)

Recall notice to the gold loan borrower

BANK OF INDIA
BRANCH

Ref. No. Date:

To. Registered acknowledgement due

Shri/Smt.
S.0/ W.0
Address:

Dear Sir,

Your Gold
Your GoldLoan A/c.
Loan No. No.
A/c.
with usus
with
Amount sanctioned:
Amount sanctioned:Rs.Rs.
Present Outstanding
Present balance:
Outstanding Rs. Rs.
balance:

take notice that a loan of Rs.

Please take
Please (Rupees
was sanctioned
sanctioned toto you
you by our Branch on against pledge of your gold
ornaments (i.e. ) Gross Weight
grams.

A sum of Rs. is now due and payable

payable to the Bank on account of the
above loan and interest. You are hereby called upon to repay the dues of the Bank
on/before , failing
, failingwhich
whichthe
theabove
abovementioned
mentionedpledged
pledged ornaments/
ornaments/ articles
articles
or sufficient portion thereof shall be be sold by the Bank for realization of the Bank's dues and
the sale proceeds thereof after deducting therefrom the costs incidental to such sale or
attempted sale will be appropriated towards full satisfaction of Bank's claim and that in case
of deficiency, the Bank shall recover the deficit amount from you. The sale of the ornaments
may be conducted by the Bank without any further notice to you on or
or
any other date fixed for the purpose.

MANAGER.
MANAGER.
• 33

ANNEXURE (F)

BANK OF
BANK OF INDIA
INDIA
BRANCH
BRANCH

Auction Notice to the Gold Loan Borrower

(Should be translated in vernacular language)

Ref. No.
No
Date:

To:
To:
(Borrower)
(Borrower)

Sir/ Madam,

Sub: Auction
Sub: Auctionof gold ornaments
of gold of yourof
ornaments Gold Loan
your Account
Gold Loan Account

We refer to to
We refer our our
letterletter
No. No. dated putting
putting you on notice to
repay the dues of Rs.
(Rupees ) in your gold loan account within 30 days
of receipt
receipt of
ofour
ourletter.
letter.

We
We have notnotyet received
yet receivedthe repayment in your account
the repayment in within the stipulated time. We do
hereby
herebycall upon
call you to
upon youpay toa sum
pay ofa Rs. together with
sum of Rs. together with interest
interest @ %p.a.
w.e.f.
w.e.f. as
asperperthethe
terms and conditions
terms conditions
and of
of the
the loan
loan documents
documents executed by you
and discharge
discharge your liabilities
your in full within
liabilities in 15 15 days
days
full from the
from
within the date
date of
of receipt
receipt of this notice
failing which
whichwe weshall be constrained
shall be constrained to auction
to the gold ornaments/
auction the gold coins pledged to
ornaments/ the pledged
coins
Bank totorealize our dues.
realize our dues.

Please
Pleasenotenote that if youif
that failyou
to remit
failthetodues within
remit the15dues
days and the Bank
within auctions
15 days andthethe Bank
pledged
pledgedornaments/
ornaments/ coins and ifand
coins the if
dues aredues
the not fully
aresatisfied with the
not fully sale proceeds
satisfied withofthe
the sale pro
gold ornaments/ coins, we shall be constrained to take appropriate legal action against you
in the court of law for recovery of balance amount from you.

Yours faithfully,

---„Ts-4-1
4g'" e
°144.
'c' iiri Iraw - '
(
'. BoardMeveriag
Board Meeting ...-i.
le C\ Branch
Branch Manager
Manager
'kr 1 44, AN
JUN2D1E
201E 55
::
.` fti
N., •
 34

ANNEXURE (G)

BANK OF INDIA
BRANCH

Sale notice to the Gold Loan Borrower

(should be translated in vernacular language)

Ref.No. Date:

To:
(Borrower)

Sir/ Madam,

Sub: Auction of gold ornaments of your Gold Loan Account

We refer to our letter No. dated informing you to repay

the dues of Rs. (Rupees
in your gold loan account within 15 days of receipt of our letter.

As we have not yet received the repayment in your account within the stipulated time as
mentioned in our letter, we are constrained to auction the gold ornaments/ coins pledged to
the Bank to realize our dues. The auction of jewels will be held at at
(time) on (Date).

Please note that if the Bank auctions the pledged ornaments and if the dues are not fully
satisfied with the sale proceeds of the gold ornaments/ coins, we shall be constrained to take
appropriate legal action against you in the court of law for recovery of balance amount from
you.

Yours faithfully,

.4brAl ei,kt. Branch Manager

Board NSee4141n n
Board NS

1 4 JUN 2016
-/
Nie.ro-PA
4> BOOM SECREIVAT
SECREIVAT
K
 35

ANNEXURE (H)

BANK OF INDIA

BRANCH

NOTICE FOR PUBLIC AUCTION OF PLEDGED GOLD ORNAMENTS/ ARTICLES

It is hereby brought to the notice of the following gold loan borrowers, their legal heirs,
persons engaged in business of gold ornaments/ articles and general public that inspite of
repeated reminders/ notices by the Bank, the following borrowers are not repaying their
dues to the Bank.

Notice is hereby published that if they fail to deposit all their dues in their respective gold
cold
loan accounts (including up-to-date interest and all costs charges/ expenses) by
(date), then from (time) of (date), their
pledged gold ornaments/ articles will be put up for public auction in the branch premises.
For this, Bank shall not be held responsible for any inconvenience or damage caused to the
concerned borrowers and no allegations or representations will be entertained from any
borrowers in this regard.

Persons interested to take part in the bidding should deposit Rs.500/- (Rupees Five Hundred
only) with the Branch Manager before the scheduled time/ date towards earnest money.
Persons having taken part in final bidding must be able to deposit full amount to the Bank
within 48 hours, failing which their earnest money, deposited with the Bank will be forfeited.
Bank reserves the right to cancel the auction without assigning any reasons in case, the
bidding price so arrived at, is observed to be low or inadequate. Further, if need be, Bank
reserves the right to change the date, time or pLakhe of the above scheduled auction or
cancel the same without assigning any reasons thereon.

Branch Manager.

—Account No. Name of the Borrower Address Gross weight of the

Gold

---;--.-
- ------- "N
C,)<%
Board Meeting OZ
Board Meeting
hp
,11&
jUN
'N 201E .>
40
7.1r=4.4-
41 kmax-cReAmg
:2 1=171:1 1
.-P‘4
 36
36

ANNEXURE (I)
BANK OF INDIA,
BRANCH

MEMORANDUM PROPOSING ci,r E OF PLEDGED GOLD ORNAMENTS AND

PROPOSMG SALE
SEEKINGPERMISSION FOR FIXING APPROPRIATE FLOOR PRICE FOR THE
PURPOSE

S.No. Particulars
1 Name of the borrowal
borrowal
accounts &
& address

2 Loan limit sanctioned Rs.

Authority & Date
_3 Present outstanding Rs.
4 Account overdue since
~5 Reasons for
Reasons for account
account
becoming overdue
6 Efforts made for
recovery
7 Details of Descriptionofof carat
gold Description Gross Net Total
ornaments pledged the item weight weight value at
the
time of
time
loan

8 Name & address of

original valuer
9 Date of notice sent
10 Response of the
borrower to the notice, if
any
11
1 1 Present
Present valuation
valuation done
done Description
Description carat Gross Net T. Total
by & details thereof of the item weight weight value
weight value
at the
at the
time of
loan

12 Prevailing market rate

..---
13 Measures proposed to 4
Measures proposed 4/3 1XT 1 e.,;\
,stri a4.4,4 \
be taken
taken for
for recovery
recovery , • Alt k- 2r-d-- 0,
6:ro,
balance amount, if . f' Board
balance amount, Board Meeting
Mtn %

(applicable where o/ 1, 44 JUN 2016 2015 57-5

,
more than the prevai . .6,),\,),41
lyVAI ,
market rate) L_L'ts4A2fir:=T
r

He..A•v"
A 37

14 Recommendations of the Branch :I

15 Comments/ Recommendations/ floor price approval

approval by
by the
the Zonal
Zonal Manager:
Floor price = i) present value of gold ornaments
ii) market rate (as per Finacle)
(whichever
(whichever is
is higher)

07:11 aikir
aat tr-6- 0
Bawd Meei/ng

Ar-- 4 JUN 2016 5:

-,
042,0„,
 38

ANNEXURE (J)
ANNEXURE
BANK OF
BANK OF INDIA
INDIA
BRANCH
BRANCH

CERTIFICATE OF REVALUATION

Ref. No.: Date:

This is to certify that we have got re-appraised and revalued the securities obtained while
sanctioning loans mentioned below under Gold Loan Scheme from the Branch through
Shri .Gold
Gold Appraiser
Appraiser of Branch.

These securities have been originally valued by Shri , Gold

Gold
Appraiser of our Branch.

S.No
S.No Particulars
Particulars Number
1 Total number of gold loans existing as on date of re-
verification
2 Of item (1), number of accounts randomly selected
@10%
3 During subsequent year, number of 10% of item (2)
• selected randomly for re-verification
4 Total
Total number
number ofof irregular/
irregular/ suspicious gold loans
suspicious gold
existing as on date for re-verification
5 Total number of accounts selected for re-verification
6 -Name of the officer involved in
inrandom selection,
randomselection,
other than the Branch Manager •
7 Details of the outcome of re-verification and action taken on findings:

Branch Manager Credit Manager

-Note: The
.Note: The re-verification
re-verification repo eoocrametWfielet)
Ar,
AKopYletVileltrAct
melun
r ecord.
record.
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