BGVB Gold Loan The Gold Loan Scheme was in existence in the erstwhile Gramin Banks before amalgamation and before formation of Bangiya Gramin Vikash Bank in 2007. However, post amalgamation the scheme was never revisited or introduced in line with the amalgamating Banks. Gold ornaments and jewellery are regarded as most valuable property in the hands of Indian household for its inherent liquidity and price. Over the period of time India vis-à-vis world economy has regarded the Gold as the most precious metal having the underlying feature of price appreciation. The economy has also witnessed the paradigm shift in price of the metal over the period of time. It has been observed that rural populace in order to meet their short term liquidity crunch often pledge gold ornaments, however, not through institutional finance rather through Mahajan comparatively in higher rate of interest. This has resulted in debt trap and losing of precious metal in the hands of few disrupting the normal flow of credit. Therefore Gold Loan Scheme has inherent quality of evenly distribution of credit in the hands of needy to meet their short term obligation towards Agricultural activity and consumption purpose. The social aspect of extending loans pledging gold ornaments in a secured and organized manner through institutional credit is robust and the bank has huge potential in this segment during the ensuing Kharif season and upcoming festive season. QUANTUM OF LOAN: 1. Agricultural purpose: Bullet Repayment: Max ₹2 lakh Half yearly Repayment: Max ₹10 lakh 2. Non-Agricultural purpose: Minimum: ₹0.25 lakh Bullet Repayment: Max ₹2 lakh EMI based repayment: Max ₹25 lakh OVERDRAFT FACILITY: Overdraft facility available. The overdraft facility sanctioned for a period of 12 months only subject to annual review. RATE OF INTEREST: 8.75% p.a. ((Linked with Bank’s half yearly MCLR) DOCUMENTATION: Application cum Loan Agreement (Proforma Enclosed) as per Annexure-iii (Revised).* *Since interest rates are now linked to MCLR, interest clause for bullet repayment I payment of interest on monthly basis be amended accordingly. All branches are advised to obtain the undertaking at pre sanction stage in each case of advance against Gold Jewellery I Ornaments. Weighing and valuation of gold ornaments is to be done by the assayer at the branch premises in the presence of Branch Manager I Officer and the Borrower concerned. Jewellery must be tested by and approved by assayer. When appraising the gold ornaments I jewellery the stones and wax contained in the jewellery should not be taken into account. The Assayer should record and weigh different items of security separately, determine the pure gold content and issue a certificate in prescribed format as per Annexure -iv (Revised) of the Bank recording the genuineness and value of security and correctness of weights recorded. A copy of the same may be given to the borrower. SAFE CUSTODY OF SECURITY: Jewellery along with a list relating to each loan is to be kept in a separate pouch or cloth bag. The pouch is to be properly and securely sealed with the metallic insignia to be supplied to the respective Branch. A tag should be attached furnishing the particulars such as Account Number, Ledger Folio, and Name of the Account, No. of Demand Pronote, No. of articles, gross weight etc. with the signature of the Branch Manager I Officer-in-charge & Borrower in Annexure - VI (Revised). The detail of items of jewellery should be recorded in the format of Gold Loan pledge & Redemption Register as per Annexure-V. Borrower should sign in the appropriate column in register to confirm the correctness of the detail while releasing the Gold ornaments.