Recently, a lot of cases have been reported in Banks that customers are pledging stolen gold in banks and taking gold loan.
The police are investigating the cases and this has raised a lot of questions on the working in banks.
As per RBI Guidelines, Gold Loan Borrowers need to provide proof that they own the gold being pledged. The guidelines of RBI clearly state that loans should not be given if the ownership of the gold is doubtful.
But if the gold has been inherited from parents, borrowers can still get loan. If proof of purchase of Gold is not available, then borrowers can give self-attested document claiming ownership of the Gold.
Some other important RBI rules for Gold Loan
The maximum percentage of the gold’s value you can borrow is now tiered based on loan size to assist smaller borrowers, with a 75% cap for loans exceeding ₹5 lakh.
Loans allowing repayment of interest and principal at maturity are capped at 12 months, with LTV calculated on the total maturity value.
Lenders must release pledged gold within 7 working days of final payment, with penalties of ₹5,000 per day for delays.
If a loan defaults, auctions require prior notice. The lender must return any surplus funds to the borrower within 7 days of the auction.
