Auction Policy

Auction Policy

This auction policy for gold loans is applicable on the occurrence of any one of below events:

• Account become NPA
• Account breaching MTM margin (LTV) threshold
• Any other event/breach of “Terms and conditions” triggering to recall of facility

Auction Notice: Once the Loan Recall Notice (LRN) is issued subsequent to occurrence of any of the above mentioned events, if the borrower(s) does not pay entire loan outstanding despite LRN being issued /LRN is returned undelivered, company will send an Auction Notice to borrower(s) and publish Auction Advertisement in at least two newspaper, one in Vernacular language in the local newspaper and another in English in national daily to intimate the public at large about impending liquidation of jewels in order to recover the dues. Auction date shall be minimum one month from the date of newspaper publication.

Re-Valuation of Ornaments: To proceed further for liquidation of the ornaments, a re-valuation of the pledged ornaments shall be done before the auction by approved appraiser.

Reserve price: The reserve price shall not be less than 90% of its current value as on date of fixing reserve price. However, in case the auctions fail twice, a reduced reserve price may be fixed by the company which shall not be less than 85% of its current value as on that date.

Auction process: The auction of the pledged ornaments would be carried out at any of the branches/office of the company through “open auction” only through its employees having necessary experience and/or training or an auctioneer empanelled by the company as per its policy and in presence of company officials in the following manner:

1. The first auction shall be conducted physically in the same location(town)/district where the lending branch is located. However, in case of failure of first auction, the company may, on an exception basis, either create a pool of various gold packets proposed for auction from multiple branches within the location(town)/district and auction them centrally in any other location(town) within the same district/adjoining district or conduct online auction. Such gold movement shall be done only after necessary security and insurance arrangement are made for the safety of gold ornaments.
2. The borrower is entitled to get the pledged ornaments released at any time before final bid confirmation to the highest bidder of auction provided the borrower clears all the outstanding dues.
3. Any Employee/promoter/director of the company/its subsidiary employees/their Relatives or any agency involved in the gold valuation with the company shall not participate in the auction.
4. The company shall provide full details of the value fetched at auction and the dues adjusted to the borrower(s)/Legal heirs(s). If the auction proceeds are more than the dues from the borrower, the company shall intimate to the borrower to visit the branch with his/her Gold Pledge Card (GPC) and company shall ensure to refund the surplus amount within a maximum period of seven working days from the date of the full auction proceeds subject to borrower visiting the branch with the GPC. However, if the final bid amount is less than the dues from the borrower, company shall recover the shortfall amount from the borrower as per terms & conditions of the loan.