Purpose

i) Priority Sector – 
For production purpose(both for short term & medium term)
ii) Non-Priority Sector –
For other purposes (not covered under Priority Sector i.e.
Medical Expenses, unforeseen exigencies, etc.)

Eligibility

Individuals (except goldsmith, jewel appraisers and their close associates) are eligible.

Proprietorship concerns/partnership firms/ companies are not eligible under the scheme. Advances to farmers, artisans, released bonded labourers, SC/ST and other weaker sections of the Society are to be considered under Priority Sector.

Advances under Non-Priority Sector may be considered preferably to our existing customers as well as to proposed potential customers.  Branches should ensure that the proponents should have capacity to service the loan.

Quantum of Advance & Margin

i)  Priority Sector –
a) Existing Card Limit for 22 carat gold –

i.e. Rs.6750/- per 10 gms. of 22 carat purity gold ornaments with reduction of Rs.300/- for every drop of one carat if there is a drop in purity/fineness of gold. 

Since gold prices are ruling over Rs.10,000/- consistently, revised card limit for 22 carat gold  is as under : Rs.7000/- per 10 gms. of 22 carat purity gold ornaments with reduction of Rs.310/- for every drop of one carat .

b) Card Limit  for gold coins - 

Since gold coins are at 99.99% purity with 24 carat,  the card limit is fixed at  Rs.7500/- per 10 gms. against gold coins.  For every fall of Rs.500/- in gold price, the card limit for gold coins will be reduced by Rs.500/-.

c) The present rate of interest being 10%p.a. for limits uptoRs.50,000/- under Agriculture, branches will be able to realize their dues without difficulty even if the borrower fails to repay the dues for 2 crop seasons at same price.

d)  With this upward revision of card limit, the branches will remain competitive in the gold loan market by actively pursuing the Scheme and it will enable the branches to garner maximum business under the Scheme.

ii) Non-Priority Sector –
Min. Rs.20,000/-  Max. Rs.3 lakh for urban and Metro  Branches for lending against tamper proof gold coins

Rate of Interest

i)  Priority Sector -
As per prevailing instructions of the Bank.

ii) Non-Priority Sector –
1.25% less BPLR presently 12%p.a. at monthly rests.

Processing Charges

Valuation charges

Loan Limit

Max. per occasion rural/ semi urban

Max. per occasion metropolitan & urban

Loan upto Rs.25000/-

25

50

Above Rs.25000/- to Rs.50000/-

50

100

Above Rs.50,000/- to Rs.1 lakh

75

150

Above Rs.1 lakh

100

200

Type of Loan

Demand Loan i.e. upto 36 months

Repayment

i)  Priority Sector –
For productive purposes, the repayment schedule should coincide with that activity i.e. with the harvest of major crops undertaken by the borrower or income pattern in respect of farm/ non-farm activity.

ii) Non-Priority Sector - 
Repayable on demand Max. 36 EMIs.

Common for both Priority & Non-Priority Sector -
If loan remains overdue for more than 6 months, immediate follow-up should be done with the borrower for payment of dues. In case there is no response, action should be initiated to protect the Bank’s interest.

In case any borrower is not responding to Bank’s follow-up for payment of dues, immediate action should be initiated for revaluation and auction of the pledged gold articles

Security

i) Pledge of gold ornaments;
ii)Pledge of tamper proof gold coins issued by our Bank/ other banks.