Loan Against Gold Ornaments

Eligibility

• Loan Against Gold Ornaments can be availed by any Indian individual resident who owns gold jewellery.
• Minimum age of applicant to be 18 years and Maximum age of 65 years for Salaried & pensioners / 70 years for self-employed.

Security

Gold jewellery satisfying below criteria only will be accepted as security:

• Gold jewellery with minimum purity level of 18 karat and above.
• The weight of stones in the jewellery should not exceed 40% of the gross jewellery weight.

Gold Loan Valuation Process

1. Gold Purity Assessment Process

The eligible loan amount is dependent on valuation of gold ornaments by a gold valuer. Only ornaments with a minimum purity of 18 carats are eligible.

The valuer may use one or more of the following standard methods to assess purity and authenticity in the customer’s presence:

• Rubbing on Soft Stone
• Sound Test
• Finishing Test
• Weight (Density) Test
• Pointed Scratching Test
• Acid Test

2. Deduction and Net Gold Weight Calculation

The net gold weight is calculated by excluding the weight of non-gold elements including any impurities and stones. The net weight (in grams) is calculated as given below:

Formula: Net Weight = Gross Weight − Stone Weight − Impurity Weight.

Example: For a gross weight of 100 grams, with stone weight of 10 grams and impurity weight of 10 grams, the net weight will be 80 grams (100 − 10 − 10).

3. Gold Rates

Gold rates are determined based on the lower of the following:

• The previous day’s closing price of 22-carat gold, or
• The average of the preceding 30 days’ closing prices of 22-carat gold, as published by the Indian Bullion and Jewellers Association (IBJA).

Note: Jewellery of purity lower than 22-carat of gold shall be valued proportionately.

4. Loan-to-Value (LTV) Calculation

The final loan amount is determined using the Loan-to-Value (LTV) ratio, currently we offer up to 75% of the assessed gold value, as per prevailing RBI regulations (subject to change from time to time).

5. Loan Eligibility

The gold loan eligibility is calculated based on the combination of net weight, gold rate & carat and applicable LTV.

Eligible Loan Amount = Net Weight × Gold Rate (per gram for given carat) × LTV

Example: For a net weight of 100 grams, gold rate of INR 11,000 per gram (22 carat), and LTV of 75%, the maximum eligible loan amount will be: 100 × 11,000 × 75% = INR 8,25,000.