Loan Schemes - Karnataka Grameena Bank

Gold Loan

Average Price per Gram (APG) of 22 carat Gold during preceding month as quoted by M/s India Bullion & Jewelry Association Ltd., to be considered for finance as follows – HO will communicate on every 10th of the succeeding month, the quantum of loan per gram. However, the loan limit should not exceed 75% of the value of gold ornaments.

Total consumption loan amount per borrower	Maximum LTV ratio
≤ ₹2.5 lakh	85 per cent
> ₹2.5 lakh & ≤ ₹5 lakh	80 per cent
> ₹5 lakh	75 per cent

Scale of Finance, Rate per gram communicated by HO or 75% of the gold value whichever is less.

Wherever exposure exceeds Rs.2.00 lakhs
All overdue Gold Loans, accounts exceeding limit of above Rs.1.00 lakh are to be re-appraised invariably at the time of regular inspection in the presence of Inspecting Officer

Value of gold jewellery will be assessed on the basis of average of the closing price of 22 carat gold for preceding 30 days as quoted by M/s India Bullion and Jewellers Association Ltd.
For the purpose of valuation, only the intrinsic value of the gold or silver contained in the eligible collateral shall be reckoned and no other cost elements, such as precious stones or gems, shall be added thereto.

Before initiating auction, the Bank shall give adequate notice to the borrower(s)/legal heir(s) through available communication channels and keep proof of the same. If the borrower(s)/legal heir(s) cannot be located despite best efforts and a public notice, the Bank may proceed with the auction after one month from the date of the public notice.
The Bank shall follow a transparent auction process, including public announcements through advertisements in at least two newspapers—one regional and one national.
The pledged gold/silver shall be auctioned only by trained and experienced bank employees or empanelled auctioneers. When auctions are conducted by bank staff, safeguards such as surprise inspections and internal audit coverage must be ensured.
The Bank shall set a reserve price not below 90% of the current value of the collateral. If two auctions fail, the reserve price may be reduced to not less than 85% of current value.
The first auction shall be held physically within the same district as the lending branch. If it fails, the Bank may conduct the next auction in an adjoining district or online.
The Bank and its related parties shall not participate in auctions to avoid conflicts of interest.
After the auction, the Bank shall provide full details of auction proceeds and dues adjustment to the borrower(s)/legal heir(s). Any surplus shall be refunded within seven working days of receiving full proceeds, while any shortfall may be recovered as per the loan agreement.