Annexure

IDBI Gold Loan

Background:

A Gold loan is a loan which is secured against gold ornaments. A borrower pledges
his gold ornaments with the lender in exchange for funds. Gold loans have
successfully enabled thousands of people to meet their urgent personal and business
needs. The Bank has been extending financial assistance against gold ornaments since
2007. Modifications in the scheme were done from time to time to suit the product to
the borrowers’ need.

2. Product Features:
S.N. Parameters Existing guidelines
2.1 Eligible branches All retail branches of the Bank
2.2 Eligible Entities Individuals above 18 years of age, firms, companies.
2.3 Purpose Short Term Loan:
To meet requirement of farmers, traders, entrepreneurs,
professionals relating to their business activities. To
meet emergency, personal requirement of individuals,
such as house repair, marriage, medical treatment,
educational expenses, consumption expenses etc.
Gold-Overdraft:
In case of Gold-OD, Overdraft against security of Gold
ornaments /gold coin issued by the Banks (up to 50gm)
for meeting needs of Agri/ business / personal needs is
permitted.
2.4 Type of facility Short Term Loan & Overdraft.
2.5 Limit Particulars Minimum Maximum
For Individuals Rs.10000/- Rs.20 lakh
For Firms/ Company Rs.25000/- Rs.20 lakh
• Gold loan cases above Rs.20 lakh upto Rs.50 lakh
may also be considered, subject to approval from
1
 Gold Loan – Product guidelines

Field CGM / Zonal Head on case to case basis.

Regional Operations Manager (ROM), during the
quarterly visit, should check adherence by branch
with the product guidelines for all cases with
sanctioned limit more than Rs.20 lakh.
• In case of Gold Loan requests for sanctioned limit of
Rs.15 lakh and more, branches shall ensure that dual
appraisal is carried out for arriving at eligible loan
amount.
• Gold Loans under Agriculture with interest
subvention benefit are also permitted with minimum
loan limit of Rs.10,000/- and maximum limit of
Rs.3.00 lakh, subject to following conditions:
a. Being a short term production credit, branches
shall ensure that the loan is being sanctioned / used
for the stated purpose i. e. crop production.
b. The loan shall be sanctioned as per Scale of
Finance (SoF) prescribed by DLTC.
2.6 Tenure Short Term Loan:
Maximum 12 months. Considering the nature of
assistance and periodicity of the loan limit, branches can
also sanction Gold Loans for a shorter tenure of 3 to 12
months.
Gold-Overdraft:
On demand, upto maximum 12 months. The facility is a
running account and sanction is valid for maximum 12
months. The overdraft limit is to be renewed after one
year for further period with appraisal of gold ornaments
pledged as security and subject to satisfactory conduct
of account. Drawing Power to be set at quarterly basis.

2
 Gold Loan – Product guidelines

Pledge of additional ornaments/part-withdrawal

/substitution may be permitted once a quarter. While
pledging additional ornaments / substitution appraisal of
the same to be ensured. Drawing Power (DP) to be
suitably modified as per card rate prevailing at the time
of substitution/ additional pledge/withdrawal/ quarterly
re-set.
2.7 Repayment Short Term Loan:
Agriculture purpose:
Under RAGIS (Gold Loan qualifying for interest
subvention) and RAWSS (Gold Loan not qualifying
for interest subvention) can be in bullet repayment or
in installments as opted by the farmer and cash flow of
the activity.
Other than Agriculture purpose: Can be paid in
installments as per cash flow.
Gold-Overdraft:
The facility is a running account and limit to be renewed
after one year for further period with appraisal of gold
ornaments pledged as security and subject to
satisfactory conduct of account. Drawing Power to be
set at quarterly basis. Pledge of additional
ornaments/part-withdrawal /substitution may be
permitted once a quarter. While pledging additional
ornaments / substitution, appraisal of the same to be
ensured. DP to be increased/ decreased based on the
card rate prevailing at the time of additional withdrawal/
substitution / quarterly reset/ pledge.
2.8 Interest Short Term Loan:
Application Agriculture Purpose (RAGIS & RAWSS)

3
 Gold Loan – Product guidelines

Interest will be charged & to be paid at the time of

maturity.
PSL- Non- Agriculture purpose (RAPGL)
Interest to be charged monthly & paid monthly. Or
Interest to be charged monthly & paid along with
principal at the maturity, but interest will be
compounded on monthly basis.
NON-PSL (RNPGL)
Charged at monthly interval and to be paid on
monthly basis.

Gold-OD (RAGLO):
For Non-Agri Cases:
Interest to be applied on daily outstanding to be serviced
fully by way of credit to OD account in following
month.
For Agri Cases:
OD against Gold may be granted to farmers only if their
cash flow supports periodical servicing of interest.
Interest to be debited & serviced at quarterly intervals.
2.9 Security Pledge of gold having purity of 18 carat & above which
may comprise of ornaments and gold coins issued by
banks only. (Gold coins up to 50 gm per borrower can
be accepted). Gold in any other form except ornaments,
i.e. coins, bars, biscuits, etc. are strictly prohibited. The
ornaments like Gold Statues" & "Gold wrist watches”
are not acceptable as security. Branches can finance
against pledge of “Mangalsutra” to help poor women in
distress, provided the same is presented by a married
woman. If it is an inseparable part of chain, gold loan
may be granted to the lady or the lady to be a joint

4
 Gold Loan – Product guidelines

borrower in such cases.

2.10 Documentation Short Term Loan:
Simplified Gold Loan documentation set (Annexure I).
It is mandatory to obtain Nomination form along with
other necessary documents.
Gold Overdraft:
• Application-Cum-letter of pledge for loan against
Gold jewellery (Annexure OD-I).
• Application- cum-pledge for Renewal/Part-release/
Addition/ Substitution of gold ornaments/coins issued
by bank. (Annexure OD-II)
2.11 Stamp duty The stamp duty applicable in Gold Loans shall be
on Gold Loans governed by applicable provisions of Stamp Act of the
respective state & exemptions available, if any.
2.12 Pricing Short Term Loan:
Pricing of Gold Loans is to be done as per Circular No.
IDBI BANK/2017-18/82/RBG/PSG-173 (Interest Rates
For Agricultural Advances) dt. 20/01/2018. Accounts
opened under Scheme code RAGIS should carry two
types of interest rate codes @ 7% from the date of
opening to the due date of the loan & after due date @
MCLR (Y) +2%. Due date of the loan under scheme
code RAGIS, should be of 1 year only from the date of
account opening, process flow & screen shots thereof
are provided in Annexure II.
Gold-Overdraft:
PSL: MCLR (Y)+2.00%, Non-PSL: MCLR (Y)+3.00%

2.13 Penal Interest Short Term Loan:

No penal interest to be charged for loans up to
Rs.25,000/-. Penal interest of 2% p.a. to be charged after

5
 Gold Loan – Product guidelines

expiry of due date for all loans above Rs.25,000/-(on

default of interest/ installment).
Gold Overdraft:
Penal interest 2% p.a., in addition to the contracted rate
of interest, on the amount drawn in excess of the limit
and for overdue period will be calculated on a daily
basis. Monthly / quarterly interest charged has to be
serviced in full by way of credit to the Overdraft
Account in the immediately following month. In case of
default, Bank will exercise its right to sell / redeem the
gold in the market after providing reasonable notice to
Clients (Ref. Auction process as applicable to Short
Term Gold Loan).
2.14 Processing Fee Processing fee in all variants of Gold Loan to be
charged as per Circular No. IDBI BANK/2017-
18/377/RBG/PSG-135 dated 24-11-2017.
2.15 Valuation charges Appraiser fee: 0.25 % of the loan amount subject to a
minimum of Rs.100/- while the cap on appraiser charges
shall be Rs.1,500/- at branch level subject to the
condition that the same shall not exceed 0.25% of the
loan amount. Wherever there are difficulties in getting
services of appraisers, the charges may be enhanced up
to Rs. 2500/- by the Regional Head (RH/Sr. RH).
ii) In the Branches where Gold Loan is being
implemented for the first time and the branch is finding
it difficult to identify Jewel Appraiser, then the higher
of the below given amount may be approved as
appraiser charge for the first six months by Sr. RH/RH.
a) Rs.500 per day of visit to the branch subject to
maximum of Rs.3000 per month. OR
b) Actual appraiser charges, along with applicable GST,
6
 Gold Loan – Product guidelines

to be collected from borrower. After six months the

appraiser charges will be paid as per the extant
guidelines.
2.16 Payment of As advised by FAD-Taxation Cell, separate income and
Valuation expense accounts have been opened in all branches for
charges. booking income and making the payment of valuation
charges to Gold Valuer/s, the details of which are as
under:
Income Account (For crediting valuation charges
recovered from the borrower):
XXX46600010474 (XXX is SOL ID)
Expenses Account (For payment of charges to Valuer):
XXX87500010047 (XXX is SOL ID)
a. The monthly consolidated bill of Jewel Appraiser
needs to be paid through APU.
b. For recovery from the customer please refer to Point
14, Page 8 in circular IDBI BANK/2017-18
/148/FAD/ TAXATION-10 dated 17.06.2017 on
Guidelines and Policy Decision for implementation
of Goods and Service Tax (GST).
c. For example: If Vendor is charging
Rs.100+18(GST), Rs. 100 will be booked in
expense account and GST in GST Account.
Simultaneously, Rs.109 + GST should be recovered
from customer wherein Rs.109 should be booked in
Income account & in GST Payable account, as
illustrated below:
A. Assuming charge of Rs.100/- to be Rs.118
paid to service provider + GST
B. Input Tax Credit available to bank Rs.9
(50% of tax paid)
C. Cost to the Bank Rs.109
7
 Gold Loan – Product guidelines

D. To be recovered from the customer Rs.128.62

[C+18%]
d. Considering the GST implications, branches are
advised not to make direct payment to Jewel
Appraiser.
Branches may please note that the existing method
of payment of appraiser charges shall be in force till
March 31, 2019 only. From April 01, 2019 onwards,
branches must route the requests for payment of
Appraiser fees as per guidelines given above.
2.17 Margin 25% minimum.
75% LTV to be maintained based on the current value
of gold kept as security throughout the tenure, including
cases of price fluctuation & accrued interest. HO will
provide card rate (loan per gram) for financing
under various gold loan categories on fortnightly
basis or as & when required depending upon price
fluctuations & changes in the rate offered by other
banks. Card rate for 22 carat gold will be provided on
Intranet at PSG-Agri site, inclusive of margin. Branches
will have to multiply the rate with grammage for
calculating the loan amount & shall proportionately
discount grammage in case of 18 carat gold.
2.18 Disbursement & Short Term Loan:
Drawdown The loan is to be disbursed in the Savings Bank/Crop
loan/ Current account of the customer or in Current or
CC account of the firm / company.
The disbursement of limit sanctioned can be made in a
single or multiple tranches based on cropping pattern
adopted by the farmer.
• Scale of Finance (SoF)

8
 Gold Loan – Product guidelines

While branches are given some flexibility of fixing their

own scale of finance, in case the SoF decided by DLTC
is found to be inadequate, the same should be
specifically recorded in the documents, with reasons for
exceeding the SoF and with approval from delegated
authority only, in line with KCC product guidelines as
under:
Sr. RHs / RHs may approve need based higher
quantum of SoF to the extent of 1.50 times the SoF
approved by DLTC as per standardized format by
PSG-CO (Annexure V). For Rs.10000/- per acre, RH
may approve h i g h e r S o F u p t o Rs.15,000 per acre.

Gold Overdraft:
1. DP to be revised at quarterly intervals.
2. For quarterly additional substitution/pledge/ release/
modification in the Finacle is to be made in the
below mentioned options by the branches:-
a) ACLHM: To modify/ alter the sanctioned limit.
b) ACM – In ‘S’ details, modifications related to
change of date of sanction/renewal/expiry
c) SRM – Security Register Maintenance

3. For pledge of additional ornament/substitution/part-

release Goldsmith certificate is required.
4. Appraiser may be paid 25-50% of the normal
appraisal charges, on the revised loan limit (to be
debited from the Overdraft account of the borrower)
in case of part release.
5. Additional pledge/ Substitution attract appraisal fees
at normal rates for the enhanced amount in case of
additional pledge and for the proportionate limit in

9
 Gold Loan – Product guidelines

case of substitution.
2.19 Insurance Blanket Insurance Policy for gold jewelry is taken at
HO for all branches as per the Bank’s Policy.
(Intranet >>Dept.>> IMD >> Useful Information>>
General Insurance policy>> Insurance Policy 2018-
19>>Bankers Indemnity Policy). Presently the
insurance coverage for cash and pledge of gold is
available up to Rs.100 crore. Any of the branches
exceeding this limit need to refer the matter to
Infrastructure M a n a g e m e n t D e p a r t m e n t (IMD) for
additional cover.
2.20 Reappraisal of Short Term Loan:
Gold Gold Jewellery /Gold coins (issued by Banks) to be
reappraised once in 6 months. Loan as under;
For loans up to Rs.5 lakh: 25% of the cases selected at
random to be reappraised.
For loans above Rs.5 lakh: All cases to be reappraised.
Overdue cases: All overdue loans to be reappraised &
charges to be collected from the customer by debiting
the loan account.
Gold Overdraft:
All Gold-OD accounts opened more than 6 months ago
and not re-appraised (by a re-appraiser) in the preceding
12 months to be included for re-appraisal.
2.21 Monitoring As the card rate is being provided by HO, Branch has to
monitor the margin periodically utilizing IBNKGOLD
menu option in Finacle to avoid shortfall in margin.
(Please refer to circular IDBI Bank/2015-
16/254/RBG/PSG/87 Gold Loan Margin Shortfall dated
August 17, 2015). Trigger for margin call shall be

10
 Gold Loan – Product guidelines

adverse movement in LTV below the stipulated level by

5%. Margin call is to be initiated by the Branches.
Branches have to initiate recovery of shortfall in the
event of trigger for margin call. Branches have to update
the SRM at the time of opening of account with
grammage and price of gold given for the particular
month. The branches to opt for recovery of shortfall
based on calculation arrived by IBNKGOLD menu
option in finacle. Branches are required to use the Gold
Loan Monitoring Tool available at Department>
Priority Sector Group> AgriBusiness> Monitoring
& Follow-up>Gold Loan Monitoring Tool. In the
monitoring tool, details of gold loan customers at the
Branch, Progress under the product for Branch, Overdue
gold loan accounts, NPA Account etc. are available
which are useful for close monitoring of the gold loan
portfolio. To bring uniformity in storage/handling of
pledged Gold contained in bags/packets across all
branches please refer circular IDBI BANK/2012-
13/137/RBG/BO/68 (Storage of Gold Loan Packets /
Bags at Branches dated June 8, 2012.
2.22 Role & The roles & responsibilities of the verticals are as
responsibilities of under:
various verticals / Priority Sector Group (PSG):
Departments for PSG (Agri.) will monitor the product performance and
monitoring provide necessary MIS. PSG-Agri Product team will
conduct regular review of Gold loans under PSL (Agri.
& Non Agri.) & will modify/refine product features as
per feedback from market, field level staff & Govt/RBI
Guidelines. Product team will update & provide eligible
loan amount per gram by reducing desired margin (Card
11
 Gold Loan – Product guidelines

Rate) on the basis of fortnightly average of India

Bullion and Jewelers Association Ltd. [Formerly
known as the Bombay Bullion Association Ltd.
(BBA)] daily gold rates on intranet as per extant
guideline.
Branch Operations:
BOSPD will be responsible for issuing suitable
guideline on safe storage and related operational
guideline in handling of the pledged gold at the
Branches. The Regional Operational Manager, during
his visit to the branch, should also inspect the security
arrangements and give comments in his report.
Infrastructure Management (IMD):
a. IMD will take care of infrastructure and security
arrangements at the branches.
b. IMD to arrange for proper insurance of the gold
pledged at the Branches.
Internal Audit (IAD):
IAD to conduct audit of portfolio in general and ensure
operational guidelines in respect of gold loans have
been observed by the branch. IAD to undertake sample
check of minimum 5% gold loan cases or as advised by
IAD, preferably those which are not reappraised by
opening the seal packets in presence of both the custody
holding officials, and the empanelled reappraiser also to
be called.
2.23 Obtaining land As the ownership of the land wherein cultivation is
records in gold being done /is proposed to be done, is not with tenant
loan farmers/oral lessees/ share croppers, the land documents
may not be insisted upon and the status of applicant as
farmer and his eligibility may be decided by BH on the
12
 Gold Loan – Product guidelines

basis of enquiry from villagers/ farmers in the area or by

obtaining the declaration. An undertaking from
applicant about proposed crop, area under cultivation,
etc. (Format enclosed) shall be obtained for calculation
of eligible loan amount. The rate of interest in these
loans, if sanctioned under Interest Subvention scheme,
will be as per Govt. guidelines. As the loan
requirements of these farmers (tenant farmers, oral
lessees & share croppers) are generally less, the
exposure to this category of farmers is capped at
Rs.1.60 lakh under Interest Subvention Scheme
(RAGIS).
2.24 Release of Gold a. When branches receive requests for release of Gold
ornaments to PoA ornaments to PoA holders / authorized
holders/ representatives of the borrowers after repayment of
authorized loan, the release may be done as under:
representatives of b. The Borrower executing a Power of Attorney (duly
the borrower after stamped & executed) for the purpose, in favour of
repayment of loan the representative.
c. Duly stamped Declaration cum Indemnity may be
obtained from the borrower, thereby indemnifying
the Bank against any losses which may be incurred
by the Bank by handing over the pledged gold to the
representative under the PoA so executed;
d. Branch to obtain the representative’s Identity,
Signature, Address (ISA) proof as per extant KYC
Policy of Bank.
e. Before handing over the pledged gold to the
representative, the branch shall prepare an inventory
of the gold in the presence of the authorized
representative and two independent witnesses in
13
 Gold Loan – Product guidelines

order to avoid any discrepancies in future.

f. In case of borrower (who is abroad), the branch to
ensure that Power of Attorney (POA) executed by
the Borrower abroad in front of Notary Public/
Indian consul is with required stamping as per the
prevalent State Stamp Laws, within the statutory
period after its arrival in India. Branch to ensure that
the POA contains specific clauses authorizing the
Power of Attorney holder to collect the pledged gold
on behalf of the Borrower and to give valid
discharge. Similarly, Deed of Indemnity executed by
the Borrower in favour of IDBI Bank is also required
to be adequately stamped as per the concerned
prevalent State Stamp Laws, within the statutory
period after its arrival in India. Sample Deed of
Indemnity to be obtained from the borrowers is
attached herewith. The same may be modified as per
the case, blank spaces may be filled in, factual
aspects may be verified before finalizing the same.
g. It may be noted that the Borrower will have to
confirm that the POA is still in force/valid and
enforceable and has not been revoked or modified or
cancelled or superseded. The same is incorporated in
Deed of Indemnity to be executed by the borrower.
2.25 Appointment or Regional Head / Sr. Regional Head is authorized to
empanelment of approve appointment/ empanelment of the jewel
jewel appraiser appraisers.
2.26 Public Notice of Public Notice of auction is to be published in a
auction newspaper (in vernacular language) widely circulated in
the locality about proposed auction sale of the pledged
gold ornaments.
14
 Gold Loan – Product guidelines

For minimizing expenses towards paper publication,

Branches/Regions may explore feasibility of publication
of Gold Auction Notices in newspaper by clubbing
cases together at Regional level within 45 to 60 days of
account becoming overdue.
However, it should be ensured that clubbing of notices
for publication at Regional level does not result in delay
in the process of auction.
2.27 GST implications Sale of Repossessed Moveable assets (including Gold
on auction of gold ornaments) attracts GST as Bank is deemed to be dealer
for the said purpose. It is the responsibility of the
dealing branch to ensure that such sale is reported to
GST Cell in time so that tax thereon at appropriate GST
rate is discharged by the Bank, and valid GST invoice
can be issued to Buyer recording such sale. Circular
hosted by GST Cell is enclosed:
IDBI BANK/2018-19/143/FAD/TAXATION-3 dated
21-06-2018 on Capturing of Non-Traditional GST Data
required for GST computation
Process of Capturing non-traditional data:
“Non-Traditional GST Data” utility has been
developed and is hosted on intranet page of Taxation
Cell wherein the dealing branches are advised to enter
the details of income booking pertaining to transactions
of Sale of Repossessed Assets which are to be captured
in Non-Traditional GST Data link hosted on Intranet,
wherein branches shall themselves input the data for
invoice generation. Based on this report, GST Cell Shall
discharge GST Tax Liability. Moreover, Invoices for the
customer details captured will also be generated easily.
Branches are advised to enter the details in this utility
15
 Gold Loan – Product guidelines

immediately on passing the entry in Finacle. Access link

for the said application and User manual is provided in
Taxation Cell Intranet Page as under:
Application Link: Departments>Finance & Accounts>
Taxation Cell>Goods & Service Tax>Non-Traditional
GST Data.
User Manual: Departments>Finance & Accounts>
Taxation Cell>Goods & Service Tax>User Manual for
Non-Traditional GST Data
Branches shall note that based on the data updated by
them in the given utility, Taxation Cell shall generate a
report on the 1st day of next month for necessary
compliances, reporting and discharge of GST.
Branches shall ensure that such data in timely entered
and in case the data is not captured in the said link, then
it will be construed that sale of moveable repossessed
assets is only for such sum, whose data is available in
Non Traditional Data Link on Intranet. GST Cell would
not be able to discharge the Tax Liabilities in other
cases which has State wise financial implications.
2.28 Interest Branches shall adhere to changes in guidelines on
Subvention Interest Subvention Scheme communicated from time to
time.

3. Initiation of process of auction for recovery:

Branches to undertake auction of Gold in case of default immediately on
default to avoid any reduction in value of the security without waiting for slippage of
account into NPA.
4. Other guidelines:
4.1 Post Sanction Monitoring: In respect of gold loans for agriculture, especially
subvention cases, branches should ensure end use by way of visit to the village,

16
 Gold Loan – Product guidelines

land, checking land records, making discrete enquiries with nearby farmers etc.
4.2 Branch shall ensure that gold loan is not extended for speculative purposes.
4.3 Gold in any other form except ornaments, i.e. coins, bars, biscuits, etc. are strictly
prohibited. The ornaments like “Gold Statues” & “Gold wrist watches” are not
acceptable as security. However, financing against Mangalsutra to help poor
women, in distress, provided the same is presented by a married woman. If it is an
inseparable part of chain, gold loan may be granted to the lady or lady to be a
joint borrower in such cases. No loan should be sanctioned against bullion/
primary Gold.
4.4 Gold loans are to be granted only after getting gold jewelry/ornaments duly
appraised by the Gold appraiser appointed by the Bank.
4.5 No prepayment penalty to be charged for gold loans.
4.6 Due care should be taken not to accept damaged gold ornaments as pledge. While
accepting damaged gold ornaments, a declaration to that effect shall be obtained
from the borrower.
4.7 Once gold jewellery is appraised, the same should not be parted with unless the
account is closed. A register to be maintained at the respective branches for
recording pledge and release of gold ornaments as per the existing procedure.
4.8 Guidelines applicable for Crop Loans (KCC) will be applicable for gold loans
(under interest subvention scheme) also.
4.9 In view of the directives from GoI & RBI, Branches are strictly advised to ensure
end use of funds.
4.10 In case of Interest Subvention Scheme, it is mandatory to obtain land records
from the farmers irrespective of the quantum of the loan. However, while
granting Gold Loans (under interest subvention scheme) to tenant farmers, oral
lessees & share croppers, as the ownership of the land wherein cultivation is done
/proposed to be done, is not with tenant farmers / oral lessees / share croppers, the
land documents may not be insisted upon and the status of applicant as farmer
and his eligibility may be decided by BH on the basis of enquiry from villagers/
farmers in the area or by obtaining the declaration. Undertaking from the
17
 Gold Loan – Product guidelines

applicant about proposed crop, area under cultivation, etc. (Format enclosed)
may be obtained for calculation of eligible loan amount for cases having
sanctioned limit upto Rs.1.60 lakh.
The loan amount is to be fixed on the basis of Scale of Finance
as recommended by DLTC and computed on the basis of land being cultivated by
the farmer, cropping pattern adopted by the farmer (All the crops cultivated by
the farmers including vegetable crops may be considered for arriving at eligible
amount). In case of genuine requirement of the borrower the Regional Head can
approve higher SoF up to extent of 1.5 times the SoF provided by DLTC. The
detailed guidelines on SoF are issued in KCC circular dated February 15, 2018.
Branch shall use interest table code ‘ISFIX’ under the scheme code for
all accounts eligible for interest subvention. In case the borrower is eligible for
interest subvention on part of the loan amount, then two different loan accounts
need to be opened. Branch to take care to keep the application forms/ land
documents complete in all respects including area under cultivation, Scale of
Finance calculation, justification for higher SoF, etc. BSR codes pertaining to
crop cultivation only are to be used in cases seeking interest subvention benefit.
4.11 For loans sanctioned for agriculture purpose but without Interest Subvention
benefit, branches shall consider the assistance primarily on the basis of the value
of the gold ornaments pledged without necessarily linking it with the Scale of
Finance as such advance is also required for Agri & allied activities being
undertaken by the farmer.
4.12 If the borrower is eligible for interest subvention for part of the loan amount, the
breakup of the loan amount as also the applicable rates of interest must be clearly
mentioned in the letter, communicating the sanction of gold loan.
4.13 PSL Gold loan (other than for agriculture purpose) sanctioned for purchase /
construction of dwelling units may be classified under PSL. Gold loans for repair
/maintenance of dwelling units up to a limit of Rs. 5 lakh in metropolitan areas
and Rs. 2 lakh in other areas may also be classified under PSL after obtaining a
declaration. Occupation code ‘95011’ may be used for such loans. Branch to

18
 Gold Loan – Product guidelines

record the details of the property and sample checking may be done by the
branch.
4.14 Entire disbursed amount to be directly credited to the borrower’s savings
account, Crop loan account/ CC account as applicable, net of charges, if any.
4.15 Branches should use only standardized tamper evident bags for storing pledged
gold ornaments. In order to ensure seamless supply of these bags, PSG-CO has
arranged for supply of these pouches with requisite security features through
Stationery Department - CPU. Branches shall assess the requirement of these
bags on the basis of existing and anticipated Gold Loan business and place indent
for the same exclusively through Stationery Indent System
(http://10.144.118.25/stationary_indent/) using following stationery codes:
STA. Code Type of Stationery Stationery description
PSG14 Priority sector Documents (Bilingual) PSG - Gold Loan Pouch (Small)
PSG15 Priority sector Documents (Bilingual) PSG - Gold Loan Pouch (Big)

4.16 The pledged articles should be kept in properly sealed packets and kept in the
double lock almirah held under the joint custody of the Key Holders. The
guidelines for handling the pledged jewelry are as under:
• In branches where strong room is available, branches should purchase a
steel cupboard (Godrej / Steelage Make) with dual key system to store the
gold bags / packets. The gold bags / packets should be kept in plastic/
aluminum trays duly numbered. The Cupboard should be kept alongside the
Cash cupboard and should be operated only by joint custodians.
• In branches where strong room is not available, branches should keep the
gold packets / bags in a defender/ Chubb with dual key system,
exclusively purchased for this purpose. This safe should not be used to store
anything other than the gold packets / bags.
• The total number of gold packets should be controlled by means of a
control register showing the total number of packets, lodgments and
withdrawals from the cupboard / safe. The custody of the register shall be
with the SOM / BH.
• The total number of packets / bags as mentioned in control register should
19
 Gold Loan – Product guidelines

be tallied once in a month with actual physical count of the packets and
with the number of gold loans as per the Finacle system. The fact of tallying
the same as per the above process shall be mentioned by the branch in the
said register under the signature of the joint custodians. Monthly
balancing to be certified by BH, without fail.
• Branch Head Compliance Certificate (BHCC) to include a confirmation of
reappraisal of Gold Loan.
4.17 AML guidelines, Banking Codes & Standards Board of India guidelines, KYC
norms, Income Recognition & Asset Classification norms.
4.18 NABARD/ RBI guidelines regarding l e n d i n g t o agricultural s e c t o r to be
adhered to without fail.
4.19 The loan needs to be utilized by the Non-residents only for meeting their
personal needs and not for any of the activities in which investment by Non-
residents are prohibited, which includes investment for agricultural or
plantation purposes.
4.20 Branch shall follow the timely recovery mechanism including auction of Gold
in case of default.
4.21 Weighing scale used in the branch to be recalibrated every year from an
authorized agency.
4.22 Acid test of ornaments should be mandatory by appraiser for loans above
Rs.1 lakh and RMs to ensure that the same is carried out.
4.23 It is mandatory to capture data of women/weaker section/minority borrowers in
the system, while opening gold loan account by the concerned RM.
4.24 The reappraiser will sign off in red ink on the bag after verification and also
in the pledge register. He will separately give a list of all accounts checked and
discrepancy observed, if any.
4.25 Guidelines on Settlement of Deceased Claims will be applicable as per extant
Banks guidelines (Please refer Department – Branch Operation Support &
Policy – Settlement of Deceased Claims.)

20
 Gold Loan – Product guidelines

Appendix
Gold Loan – SB Account Opening Process
• Pre-opened “ Welcome Kits” to be used for opening of SB accounts of
Gold Loan borrowers in case of non-account holders.
• All documents required as per KYC norms to be obtained along with the AOF
for these accounts.

• BH/SOM shall sign on the AOF confirming availability of required

KYC documents.

• SB account number as per “Welcome Kit‟ will be allotted to the Gold

Loan customer. BH/SOM will confirm through email to respective RPU that
all the KYC documents have been obtained and the freeze on SB account
under respective welcome kit to be removed.
Criteria for Appointing Appraisers of Gold ornament
i) Selection Criteria for appointment of Appraiser/ Re-appraiser:
 The branch to ensure that the gold appraiser/ reappraiser should be of good
reputation and integrity. Thorough enquiries must be made from various sources
including some of our good customers; banks panel advocate, local police, other
banks etc. The appraiser must possess prior experience with other banks /NBFCs/
Co-op. credit societies dealing with gold loans It is preferable to have 2
appraisers per branch and it is mandatory to have 2 appraisers if monthly
business is more than Rs.50 lakh.
 The appraiser should have business place, either owned by him or taken on
long lease.
 The appraiser should be carrying on the business at the current place
(Village/town / city) at least for 5 years in the case of rural areas, and at least 10
years in semi urban / urban areas. Rural Branches can appoint appraisers from
neighboring villages or Taluka place in the absence of qualified appraiser in
the village/ locality.
 The appraiser should have a satisfactory banking relationship with our bank or
any other bank for last 3 years. Banker’s opinion reports to be taken if
21
 Gold Loan – Product guidelines

required.
 Income tax assessment records may be obtained for the last three years, if the
appraiser is Income Tax payer.
 The appraiser should have experience of being appraiser of any other public/

private sector bank for at least 3 years. This condition can be relaxed for rural
branches; he should be at least empanelled valuer of a Co-operative Credit
Society.
Operating Guidelines:
 Branch Head should send recommendation for Appointment/empanelment of
the Jewel Appraisers to the Sr. RH/RH with his observations and
recommendations. Sr. RH/RH shall approve or reject the recommendation and
communicate the same to branch.
 Regional Heads / Sr. Regional Heads have been authorized to approve the
recommendation from Branch Head for Appointment/empanelment of the Jewel
Appraisers, though there are deviations from product guidelines.
 Branch to maintain proper record of such approvals for audit verification and
handover at the time of change in incumbency (BH).
ii) Additional Criteria for appointment of re-appraiser:
In addition to above stipulation, the following criteria have been laid down for
selection of re-appraiser.
 Appointment of re-appraiser should be with the approval of Sr. RH/RH.
 After getting sanction from the Sr. RH/RH, the bank has to execute the
agreement with the Jewel Appraiser.
 The re-appraisers should be with at least three years’ experience with
any other PSB/Private bank.
For rural/ semi urban branches, re-appraiser may be appointed from amongst the
appraisers of our Bank from other locations (min. 15 Km away). In case of
genuine difficulty and in very exceptional cases, Sr. RH/RH may approve
appointment of re-appraisers from the same location, from other banks. In any
case, appraisers and re-appraiser shall not be family members/ relatives. For

22
 Gold Loan – Product guidelines

urban/Metro branches, the stipulation of appointing out stationed re- appraisers

is not applicable i.e. the appraiser of the branch in same location may also be
appointed as reappraiser.
 Mutual group of appraiser and re-appraiser shall not be allowed to be formed and
reappraisal activity should be carried out by frequently changing re-appraisers.
If there is any difficulty, branches should consult their Regional Office and
arrange to get gold jewels reappraised.
 Apart from these, procedural aspects of valuation process have been laid
down in Appendix to ensure adequate safety in the process of valuation.

23
 Gold Loan – Product guidelines

Parameters for selection of Appraiser and Re- appraisers

Sr. Particulars Preferred Parameter

No Appraiser/Re- Rural Urban/Semi Urban Metro
appraiser
1 Location of Same or Village in Proximate to Branch location Proximate to
jewel appraiser service or / Max. approx. 5 Km Branch location
except for area or at proximate to Away from Branch location. or / Max.
re- appraiser Branch location or any Approx. 10 Km
who should be other village or Taluka Away from
from other which is conveniently Branch location.
location. linked, located on
merit of each case.
Re-appraiser For rural Branches For rural/ semi urban
the branches, re-appraiser may be
re-appraiser appointed from amongst the
should be appraisers of our Bank from
from another location. from other locations (min. 15
Km away). In case of genuine
difficulty and in very
exceptional cases, RH may
approve appointment of re-
appraisers‟ from the same
location, from other banks. In
any case, appraisers and re-
appraiser shall not be family
members/ relatives.
For urban/Metro branches,
stipulation of appointing out
stationed re-appraisers is not
applicable, i.e. the appraiser
of the branch in same
location may also be
appointed as reappraiser
2 Ownership of the Owned/ Long Lease Owned/Long lease Owned/Long
shop in Shroff Lease
market.
3 Business Min 5 Yrs Min 10 Yrs Min 10 Yrs
Tenure in
same place
(Village/ town
/city)
4 Residence in the Min 5 Yrs Min 10 Yrs Min 10 Yrs
present place
(Village/ town
/city)
5 Should have At least for 3 Previous At least for 3 Previous years. At least for 3
satisfactorily years. Previous years.
24
 Gold Loan – Product guidelines

Sr. Particulars Preferred Parameter

No Appraiser/Re- Rural Urban/Semi Urban Metro
appraiser
conducted of
Banking
relationship with
our Bank or
any other bank.
6 Experience as Valuer with any organization;
a Working Preferred Preferred/ Optional Preferred/
as /Optional Optional
Government
valuer (Supported
by Authorization
letter/ Certificate
etc.)
b Working Preferred/ Optional At least for last 3 years. At least
as for last
empanelled gold 3 years.
valuer at PSU /
Pvt
Sector
Bank.
(Supported by
Authorization
letter/ Certificate
etc.)
c Valuer of Local At least for last 3 years. NA NA
Co- operative
Society.
(Supported by
Authorization
letter/ Certificate
etc.)
d Valuer of NBFC. Preferred/ Optional Preferred/ Optional Preferred/
(Supported by Optional
Authorization
letter/ Certificate
etc.)

In exceptional cases, the BH may propose deviations/relaxation in the same

with proper justification. GM (Business) of the Zone/Sr. RH may consider such
waivers/ deviations from stipulated guideline.

25
 Gold Loan – Product guidelines

Operational Guidelines for Appointment of Gold Appraiser/Re-Appraiser

I.) Appraisal of Gold:

1. Valuation of Gold ornaments should be done in the Bank premises.

2. Calibration of weighing scale used in the Branch to be done in the
Bank premises every year from authorized agency.
3. Acid test of ornaments should be mandatory by appraiser for loans above
Rs.1 lakh and RMs to ensure that the same is being carried out.
4. Branch Head should recommend the Jewel Appraisers to the RH/Sr. RH
for empanelment as Bank’s Gold Valuer.
5. After getting sanction from the RH / Sr. RH, the branch has to execute the
agreement with the Jewel Appraiser.
6. Gold loans to Jewel Appraiser/ his relatives should not be permitted.
7. Branch should ensure that jewel appraiser is not involved in work relating
to entries in register, making label/packets and entering bank vault,
opening safes etc. His work should be confined to checking of jewels for
quality/weight and filling the portion pertaining to the appraiser.
8. In Gold Loans with requested limit of Rs.15 lakh and above, dual
appraisal shall be mandatorily carried out before sanctioning of the loan.
II.) Reappraisal of Gold:
1. For loans up to Rs. 5 lakh: 25 % of the regular loans selected at random and
all overdue loans to be appraised.
2. Loans of Rs.5 lakh and above to be appraised again within a period of
6 months of sanction of loan. For this purpose, branches should carry out
re- appraisal exercise once in every 6 months.
3. Gold jewelry once reappraised may not be reappraised again during the
currency of the loan.
4. Reappraisal should be done under the supervision of both key holders of
the branch. The jewels are to be taken out just before reappraisal and
returned to dual custody, immediately after reappraisal.
5. The reappraiser will sign off in red ink on the packet after verification and

26
 Gold Loan – Product guidelines

also in the pledge register. He will separately give a list of all accounts
checked and discrepancy observed.
6. Particulars of reappraised gold loan accounts should be noted in a
separate book with the rulings and signature of the person who has
reappraised the jewels should be obtained against each entry.

7. If any major discrepancy impacting reduction of value of gold noticed,

corrective steps should be taken by contacting the borrower and also the
same should be brought to the notice of first appraiser.
8. Whenever any discrepancy is detected during reappraisal, it should be
reported to the concerned Sr. Regional Head /Regional Head and suitable
action as advised by Sr. Regional Head /Regional Head is to be taken.
9. In case reappraisal reveals even a single spurious gold loan, branch shall
carry out reappraisal of entire gold loan portfolio.
10. Where gold loans are found to be backed by spurious ornaments, rate of
interest for clean overdraft is to be charged under advice from the Sr. RH/RH.
The advance is to be recalled immediately on detection of spurious security
and other action from the fraud/ vigilance angle as per the guidelines has to
be initiated.
11. The services of the jewel appraiser should be stopped even if single gold loan
is found to be backed by spurious jewelry.
Fee Structure:
a. Appraisal:
Appraiser fee - 0.25 % of the loan amount subject to minimum of Rs.100/-. It is
decided to enhance the cap on appraiser charges from Rs.400/- to Rs. 1,500/- at
branch level subject to the condition that the same shall not exceed 0.25% of the
loan amount. Wherever there are difficulties in getting services of appraisers, the
charges may be enhanced up to Rs. 2500/- by the Regional Head (RH/Sr. RH).
The borrower shall pay the appraiser fee. Branches to take due care of TDS
and GST requirements while making payments to appraiser.

b. Re-appraisal:
27
 Gold Loan – Product guidelines

• The reappraisal fee is payable at the rate of Rs. 0.25% with a minimum of
Rs.50/- per loan subject to a ceiling of Rs.100/- per loan. In the case of
overdue Gold Loans reappraised, reappraisal fees have to be collected
from the borrowers. However, Bank will bear the reappraisal charges of
randomly selected regular loan accounts. Reappraisal fee should be paid
by the branch where the appraisal has been carried out and not by the
branch to which the re- appraiser is attached.
• In case the jewel appraiser engaged for reappraisal is from an outstation
location, the actual bus fare or second-class train fare can be paid (capped
at Rs 100). Besides the fare, halting allowance can be paid at the rate of
Rs. 100/- per day. Such Charges be paid with Sr. Regional Head’s
/Regional Head’s approval.

28
 Gold Loan – Product guidelines

Format Visit Report cum recommendation for Appointment of the Gold Valuer
1. Name of Gold Smith/Firm: ______________________________________________
2. Address of Shop: _________

3. Date of establishment:

4. Ownership details:
5. Residential Address:
6. Date since residing Ownership details:
Sr. No/ Particulars Observation/Remarks
1. Date of Visit
2. Comment on Location
of the shop.
3. Business Experience _________ years
4. Experience as appraiser Yes / No If yes, number of years
/ valuer:
a) As Government
valuer
b) As empanelled gold
valuer of PSU /Pvt.
Sector Bank.
c) As empanelled gold
valuer of Local Co-
operative Society.
d) As Valuer of Gold for
NBFC
5. Present Banking
Arrangement Name of
the Bank and dealing
since:
6. Market Enquiries Name and Contact Comments about
from 3 different number trustworthiness
Sources (Name of the
persons with whom the
enquiry is done)
7. Financial position:
Approximate Turnover in
last FY
8. Income Tax Payer
(IT Return / PAN No. to
be obtained if available)
9. Net worth certificate:

29
 Gold Loan – Product guidelines

Documents obtained and attached herewith:

1) KYC documents.

2) Registration of firm/shop act license etc.

3) Grampachayat certificate to confirm that the person /firm is engaged in the

business of jewellery /manufacturing of jewellery since ……..yr. etc.
4) PAN No.

5) IT Returns

6) Certificate/ offer letter from Bank/NBFC/Govt. for appointment as

authorized valuer.
It is confirmed that the appraiser fulfills the selection criteria and preferred
parameters, except, 1)……………..….…and 2)……………….………..for which
t h e deviation/ relaxation recommended for approval of the GM (RBG), for the
reasons as under:
-------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
The necessary documents for the appointment of the gold valuer is are obtained as per
Appendix-II.
Recommendations by BH and one Senior Branch officer.

Sign: Sign:
Name: Visiting Officer Branch Head

Approved/Rejected.
Sign:
General Manager
Date:

30
 Gold Loan – Product guidelines

Format Agreement between the Jewel Appraiser and the Bank

[To be stamped as an agreement and indemnity per the Stamp Act of the State
where this document is executed]
This Agreement made on ………… day of ………………………….
20…… at
……………………….. by and between IDBI Bank Limited, a company
incorporated and registered under the Companies Act, 1956. (1 of 1956) and a
banking company within the meaning of Section 5 (c) of the Banking Regulation
Act 1949, having its Registered office at IDBI Tower, WTC Complex, Cuffe
Parade, Mumbai – 400 005 and a Branch Office, inter alia, at
(hereinafter referred to “the Bank”
which expression shall unless it be repugnant to the subject, meaning or context
thereof, be deemed to mean and include its successors and assigns)
AND
Shri……………………………………….S/o………………………………………
aged about …….. years and residing at ………………………………………
hereinafter referred to as the "Jewel Appraiser" which term wherever the context so
requires or admits shall also include his heirs, executors, agents, administrators and
assigns).

WHEREAS the Bank has agreed to engage the services of the Jewel Appraiser for
the purposes hereinafter appearing and upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, it is agreed by and between the Bank and the Jewel Appraiser
as follows:
1. This contract will commence and come into force on and from
…………… and will continue in force until it is determined in the manner
hereinafter provided.
2. Jewel Appraiser is not an employee of the Bank but is executing this
agreement as a Special Contract and neither the provisions of the Industrial
Development Bank of India limited Staff Rules/Officers' Service Rules will
 Gold Loan – Product guidelines

apply to him nor any other Rules/regulations governing the employees of the
Bank from time to time and he is in no way required to subject himself to the
general discipline of the Bank as is applicable to an employee of the Bank.
He will be governed solely by the terms and conditions of this agreement
and of such other contracts or agreements as may be executed
between him and the Bank.
3. The Jewel Appraiser is engaged for doing the work which is ordinarily or
customarily done by jewel appraisers upon the understanding that he is or
may be engaged in his own business or trade, provided that he shall be
bound to attend to the work relating to the appraising of jewels produced to the
Bank for loans/ advances at or during such time or hours as may from time to
time be fixed or determined by the Bank and notified to him orally or in
writing and during such times or hours he shall devote all his attention for the
said purpose.
4. The Jewel Appraiser shall faithfully and diligently do or perform the work or
duties assigned to him from time to time at the …………... Branch of the
Bank and/or at such other Branch or Office of the Bank as may be required by
the Bank.
5. In relation to his work as appraiser or assayer, the Jewel Appraiser may be
required and shall be bound to follow such procedure and to complete or fill
such forms or declarations as may be prescribed by the Bank from time to
time.
6. The Jewel Appraiser shall be bound to observe strict secrecy with regard to all
affairs of the Bank, all dealings and transactions of the Bank with other banks
or with the customers or others, the state of accounts of the Bank with its
customers or others and in all matters pertaining thereto. The Jewel Appraiser
shall not either before or after the termination of this contract divulge or
disclose any secret or confidential information entrusted to him or arising or
coming to his knowledge in the course of his work or duties under this contract
or otherwise in or relating to the business of the Bank or of the customers or
others having business or dealings with the Bank.
 Gold Loan – Product guidelines

7. The Jewel Appraiser shall be responsible for the due safety (both within and
outside the Bank premises) of and be held accountable for and shall on
demand forthwith deliver or make satisfaction to the Bank of all specie,
ornaments, documents, letters, files, stationery and any things and articles of
any description whatever received by him (or by any person or persons with
his consent expressed or implied or at his connivance) from the Bank or on
behalf of the Bank from any customer or other persons having business or
dealings with the Bank.
8. The Jewel Appraiser shall be liable to make good to the Bank any loss or
damage which shall or may be caused to it in consequence of any mistake,
default, omission, neglect or misconduct made or committed by him in the
performance of his duties as Jewel Appraiser.
9. The Jewel Appraiser shall be responsible for the genuineness of all jewellery,
whether of gold or silver or other metal and of precious stones, etc., which are
proposed to be accepted by the Bank for pledge on his appraisal or on the
appraisal of any person authorized by him for the purpose, and shall be liable to
make good on demand any loss which the Bank may sustain in
consequence of the erroneous or defective appraisal of the pledged articles.
10. The Jewel Appraiser shall be remunerated for his work by way of commission
only as determined by the Bank from time to time in its absolute discretion and
he shall not be entitled to any other remuneration, reimbursements and other
charges whatsoever. The Jewel Appraiser shall make his own arrangement for
transport or other conveyance at his own cost.
11. The Jewel Appraiser shall furnish in the first instance security to the satisfaction
of the Bank in the sum of Rs…………………… (Rupees
……….…………………………………) or a Suvidha deposit in the Bank, in
the name of the Jewel Appraiser only which is renewable form time to time at
the option of the Bank until this agreement is terminated or decided by the
Bank to render the same ineffective at the absolute discretion of the Bank with
power to the Bank to call such further security as the Bank may from time to
 Gold Loan – Product guidelines

time determine, and to execute in respect thereof such agreement.

12. The Jewel Appraiser hereby agrees that in the event of his absence from his
place of business, he authorizes with the prior approval of the Bank, any other
competent person to appraise jewels in his place for a temporary period he
shall be responsible in all respects for work of appraisal done by his authorized
person and the Jewel Appraiser shall be responsible to meet all expenses,
charges, etc., of the authorized person so engaged by him and further that the
Jewel Appraiser shall be liable to reappraise soon after his return to his place
of business on prior appointment with the Bank all jewels appraised by such
authorized person. The Jewel Appraiser shall give the letter of authority as per
the format annexed hereto.
13. This Agreement may be terminated by either party, giving to the other one-
months’ notice in writing of his or its intention to do so. The Agreement
shall stand determined at the expiration of one month from the date of receipt
of notice by the other party receiving it provided always that if the Jewel
Appraiser or his authorized person is considered by the Bank on account of
his/ authorized Agent's negligence or carelessness in the performance of his
duties or has committed fraud or practiced dishonesty or has committed gross
misconduct or if there shall be a breach by the Jewel Appraiser/ authorized
Agent of any of the stipulations and conditions hereinbefore contained it shall be
lawful for the Bank to put an end to this Agreement forthwith by giving the
Jewel Appraiser written notice of its intention to determine it forthwith and
whether or not the circumstances in any particular case justify the Bank in
summarily putting an end to this agreement shall be decided solely by the
Bank whose decision shall be final and binding on the Jewel Appraiser.
14. In the event of the Jewel Appraiser ceasing to be the Bank's jewel appraiser by
termination of this agreement or otherwise, the Bank shall be entitled to get the
jewels earlier appraised by the Jewel Appraiser, reappraised by any other
persons and the Jewel Appraiser shall pay to the Bank, the entire cost of such
reappraisal.
 Gold Loan – Product guidelines

15. NOTWITHSTANDING the termination of this Agreement, the liability of the

Jewel Appraiser in respect of his authorized Agent's mistake, frauds, acts or
other irregularities committed during the period of agreement, but not detected
at the time of the termination, shall not cease and the Jewel Appraiser shall be
liable to the Bank for all losses, expenses and charges payable in respect
thereof including Court costs, etc., if any.

IN WITNESS THEREOF THE Jewel Appraiser and the Bank acting through its
authorized officer has hereunto set their respective hand on the date, month and
year above mentioned.

Signed and delivered by the within named Shri…………………………………….

Signed and delivered by the IDBI Bank Limited by the hand of Shri.

…………………………… and its authorized officer

 Gold Loan – Product guidelines

Letter of Authority
From Photo of Photo of
………………………………… original authorized
………………………………… appraiser person

To,
The Manager, IDBI Bank
Dear Sir/Madam,
Sub: Appraising of Jewellery
Ref: My agreement dated……….

I…………….. hereby authorize Shri.………….……………………son of Shri…..…

……………aged about……..years residing at ……………………… ……. to do
the work of appraising of jewellery in terms of the agreement referred above
during my absence from…………… to ………… as I will be out of station
during the above period. I hereby agree that I shall be responsible to IDBI Bank
Ltd. against all loss, damage, etc. that may be caused by any or all acts done by him
or on account of him.
I shall also be liable to meet his charges, if any, and the Bank shall not be liable to
pay to me any other charges except as agreed in terms of the agreement referred
to above and I shall continue to be bound by the terms and conditions of the said
agreement.
Shri ……………………………….. Signs as under………………………

Yours faithfully,
(Jewel Appraiser)
Place:
Date:
I Shri …………………………….. son of Shri ……………………………..
hereby agree to do the work of appraising of jewellery during the
absence of Shri.………………………………. f ro m … …………….. to
… ………………. an d I d e c l a r e and agree to abide by the terms and
conditions of the agreement dated ……………. executed by and between Shri.
………….. and the Bank .
Place:
 Gold Loan – Product guidelines
Dated: Signature of the person authorized

Note:-Engaging the services of an authorized jewel appraiser (in the absence of

empanelled appraiser) shall be done only with Sr. RH/RH approval.
 Data on Appointment of Appraiser/Re-appraiser at Branches Format for RH Office
(To be submitted to Zonal Office)
Sr. Zone Region Branch Appointment Name of Phone Date of Selection
No as Gold Gold No. Appointment criteria
Appraiser or Appraiser/ of Appraise r/ for which
Reappraiser Reappraiser Reappraiser deviation
is
obtained,
if any

Sr.Regional Head/Regional Head

Appendix –
Format of Gold Loan Pledge and Redemption Register
(For recording pledge and release of Gold ornaments) Loan No. and Date

Loan No. Name Particulars of jewels pledged Initials Date of Date of Ack.
and and of loan release from the
Date address Officer closure borrower
of
Borrower Sr. No. Description Gr. Wt. Net. Wt.

Format of register for recording particulars of reappraised Gold Loan

Loan Date of Description Gross Net Value Signature of Discrepancy, Action

No. Reappraisal of Jewels Weight Weight of the if any Taken
Jewel Reappraiser

Note: The Register to be maintained with the above ruling should be

kept in double lock.

27
 Gold Loan – Product guidelines

Procedure to be observed in Auction of Gold Ornaments

Recovery of Overdue Gold Loans through Auction of Gold
Ornaments
The recovery process to be observed by the branches in respect of Overdue Gold
Loan Accounts is given below:

1. Demand Notice to the borrower: Within 15 days of account becoming

overdue, a Demand Notice is to be sent to the defaulting gold loan borrower
informing the status of his/her sticky gold loan account/s and the total dues in the
said account/s, and advising them to liquidate the account/s within 15 days from the
receipt of the said Demand Notice. In case of deceased borrower, demand notice
should be served on the legal heirs/ claimants of the borrower at the last known
address. The Demand Notice should contain a specific clause stating that in the
event of the failure to liquidate the gold loan account/s on or before such period, the
Bank may invoke the pledge and sell the pledged gold ornaments and recover the
loan dues from the sale proceeds. The said notice should be delivered to the
borrower through Registered Post with Acknowledgement due (Regd. A. D.) or by
hand delivery with due acknowledgment. In case the Demand Notice issued by
Bank is returned unserved / undelivered, branch shall retain the returned notice
with remarks thereon for records. (Format attached-GLA-I)
2. Pre Auction Intimation Notice to the borrower: If the borrower fails to repay the
dues within the stipulated period as mentioned in the Demand Notice then a Final
Notice through Regd. A. D. or hand delivery with due acknowledgment should be
issued immediately to the borrower informing him/ her / legal heirs /claimants of
borrower about the Demand Notice and about his/ her failure to clear the dues in
the gold loan account. It should also clearly indicate Bank's intention to sell the
pledged gold ornaments by a public auction and/or a private sale, without further
reference to the borrower and the borrower would be liable for the cost and
expenses for auction sale and incidental recovery expenses. (Format attached-
GLA-II)
3. Latest Valuation of the ornaments to be auctioned: Before auction sale, the
branch should obtain latest valuation certificate (not older than a week) of the
pledged gold ornaments in writing from the authorized appraiser of the Bank. This
is for the purpose of fixing the reserve price of each item of the ornament and
earnest money deposit (EMD) to ascertain the reasonability of bids offered. A
 Gold Loan – Product guidelines

reasonable minimum reserve price must be fixed for each ornament depending on
the valuer’s report and the current market price. There should not be major shortfall
in sales proceeds and the valuation. The Authorized officer of Bank should act
prudently and transparently while conducting auction proceeding. (Format attached-
GLA-III)
4. Public Notice: Public Notice of the auction is to be put up on the Notice Board of
the Branch and also published in a newspaper (in vernacular language) widely
circulated in the locality about the proposed auction sale of the pledged gold
ornaments. Auction notice should include date, time and place of proposed auction;
the name and address of the borrower, description of gold ornaments pledged, net
weight; reserve price for each ornament; material terms and conditions of the auction
sale etc. To ensure seriousness of the participants in auction sale, EMD equivalent to
minimum 5% of valuation (rounded to thousand) or some lump sum amount may be
insisted by way of demand draft / pay order in favour of the Bank. The Bank should
specify that the sale of pledged ornaments is on “as is where basis” and “no
recourse basis is”. The Bank should reserve a right to refuse any or all bid and /
or to defer/withdraw the auction without assigning any reason at any time during
the process of the sale. The Bank may also reserve its right to sell the pledged
ornaments thorough private sale, in the absence/failure of public sale. Format of the
public notice to be put upon the Branch notice Board (GLA-IV) & the one to be
published in the local daily (GLA-V) are attached.
5. Auction: The auction should be held at the place mentioned in the auction
notice. While conducting the auction the Bank official should endeavor to realize the
full market value for security pledged on the day of auction. Branch
 Gold Loan – Product guidelines
may satisfy with the identity of the bidders participating in the auction. The
signature of bidders is to be obtained in a separate register.
The sale should be confirmed in favor of the highest bidder. When the total
amount realized in auction is sufficient to liquidate the outstanding plus interest and
other charges of the borrower in full, the auction should be stopped and the unsold
ornaments, if any, may be held in the custody of branch in the name of the borrower.
6. Documentation of events: The auction process should be documented by
recording each of the steps in the process chronologically. A brief summary of the
auction proceedings, sale, name of the highest bidders, amount realized, and delivery
for the gold ornaments to the respective successful bidders should be recorded which
is to be signed by the concerned authorized official and at least by two witnesses. The
same should be kept on record. Formats Register of Bidders- GLA-VI and Format
Selection of Highest Bidder-GLA-VII attached.
7. Delivery of Gold ornaments: The successful bidder has to take delivery of
ornaments within three working days from the date of auction by depositing the balance
amount of the bid. The balance amount of the bid should be paid by way of Demand
Draft or Pay order, in favour of the Bank. Purchase Receipt should be obtained from
each of the successful bidders after full payment at the time of delivery of the gold
ornament. In the event of successful bidder failing to comply with the payment terms, the
EMD shall be forfeited and Bank shall be at liberty to sell the pledged ornaments by
way of public /private sale at its discretion. In case of private sale, to ensure
transparency, branch may invite offers from local jewelers / interested public for each
item or smaller lots sufficient enough to discharge the borrower’s obligations. Format-
Certificate of Sale-GLA- VIII and Format –Receipt by the purchaser & Appraiser
certificate GLA-IX attached.
8. Loan adjustment: The sale proceeds should be adjusted against the loan account
and if the sale proceeds are less than the total dues, demand notice for the balance dues
should be issued immediately to the borrower. In case, the sale proceeds are more than
the total dues, excess amount may be refunded to the borrower through account payee pay
order.
 Gold Loan – Product guidelines
9. Applicability of GST on Sale of Repossessed Moveable assets:
Sale of Repossessed Moveable assets viz. Gold ornaments, attracts GST as Bank is
deemed to be dealer for the said purpose. It is the responsibility of the dealing branch to
ensure that such sale is reported to GST Cell in time so that tax thereon at appropriate
GST rate is discharged by the Bank, and valid GST invoice can be issued to Buyer
recording such sale. Circular hosted by GST Cell in this regard is given below:
IDBI BANK/2018-19/143/FAD/TAXATION-3 dated 21-06-2018 on Capturing of Non-
Traditional GST Data required for GST computation. The detailed procedure for the
same is given in Sr. No. 2.27 (GST implications on auction of gold). Branches shall
ensure that such data in timely entered and in case the data is not captured in the said
link, then it will be construed that sale of moveable repossessed assets is only for such
sum, whose data is available in Non Traditional Data Link on Intranet. GST Cell would
not be able to discharge the Tax Liabilities in other cases which has State wise financial
implications.
10. Communication to the Borrower: After completion of sale proceeding, the
Branch shall inform / intimate the borrower by way of a letter about the auction sale,
amount recovered in the account, surplus of sale proceeds in the account, if any, deficit
of sale proceeds and further recovery action to be initiated like filing suit, return of
unsold gold ornaments, if any, etc. as the case may be. Format Post Auction
intimation Letter (GLA-X) & Format BH certificate of Auction to be kept on record
(GLA-XI).
MIS
S.N. Particular Specification Description
1 Purpose of AG019 PSL gold loan under
advance Agriculture
AG036 PSL Gold Loan -
other than Agriculture
AG046 Overdraft against Gold
2 Customer STL 41,42 Male, Female
constitution OD 41,42,43,32,53,51
3 Type of account 41 Short Term Loan
20 Overdraft
 Gold Loan – Product guidelines
S.N. Particular Specification Description
4 Occupation code 01101 to 01159 Growing of food and
(a) – RAGIS & cash crops, plantation
RAWSS crops including
development finance.
4 Occupation Code 15101 to 15104,15201, 15301 to Processing, freezing
(b) - RAPGL 15303, 15401 to 15409, 15501 to and preserving of meat,
15502, 36001,16003, 17101 to fish and fruits and
17105, 17201 to 17204, vegetables, etc.
17209,18101, 1810,18201,19101, Manufacture of
19102, 19201, 19202, 20101, Textiles, Wearing
21001 to 21003,22101,23101 to apparel, footwear, paper
2 3301,24101 to 24104, 24201 to and paper products,
24204,24211 to 24214, 24219, Chemicals and
24301,25101,25102,25201, 25202, Chemical products,
26101, 26901 to 26905, 27101, Rubber and plastic
27201,27301,27302,28101, 28901, products, Machinery
29101, 29109, 29201 to 29209, and equipments etc.
29301,30001,30002,31101,31201,
31301,31401,31501,31901,32101,
33101,33201,33301,34101,34201,
34301,35101,35201,35301,35901,
3590936101,36901 to 36907,
36909,93001 to 93003, 93101,
93106, 93109
4 Occupation Code All the above excluding: • Manufacturing of
(c) - RAGLO 36901, 36902, 51301, 52311 jewellery articles (of
precious metal and
gemstones other than
diamond) and
minting of currency
coins.
• Diamond cutting &
polishing.
• Diamonds, gems and
jewellery.
• Retail sale of
diamonds, gems and
jewellery.
5 Borrower code - 41 to 49 Small farmers,
(a) RAGIS & Marginal Farmers,
RAWSS Agriculture Labour,
 Gold Loan – Product guidelines
S.N. Particular Specification Description
Tenant farmers / share
croppers, other farmers,
other borrower engaged
in allied activities.
5 Borrower code - 01 to 05, 11, 29, 31, 32 A)Manufacturing
(b) RAPGL enterprises- Micro
enterprises, Small
enterprises, Khadi and
Village industries
Sector. Tiny industries ,
Small enterprises,
B) Business Trade and
Service
-Micro enterprises
Small enterprises
5 Borrower code - 01-29, 30-39, 41-45, 49, 99 All borrower categories
(c) RAGLO mentioned in
specification column to
be considered.
6 Secured 1 Secured.
Type of Interest 2 Floating rate of interest.
7
rate code on loans