• Age: 18 years and above
• Any individual owning gold ornaments/Jewellery/Coins.
• Loans can be granted against gold ornaments/Jewellery and specially minted pure gold coins sold by our bank/other bank. The total weight of the coins should not exceed 50 grams per customer.
• Existing as well as new customer, whose willingness to open account with us.

Rate of Interest for Various Jewel Loan Schemes Charged by Our Bank

Present RLLR: 8.10% (w.e.f. 27.02.2026)

In accordance with the directions of the Reserve Bank of India (RBI), the Bank adopts the following transparent and uniform methodology for determining the net weight of pledged gold ornaments and for valuing the gold content for calculation of the Loan-to-Value (LTV) ratio.

1. Determination of Net Weight of Gold

Advances against gold ornaments are granted only after the ornaments are duly appraised by an authorized jewel appraiser, empanelled by the Bank based on professional expertise. The loan sanctioning authority (Branch Manager/Officers) ensures that the weight, fineness, and valuation of the ornaments are fully verified and found satisfactory before sanction.

Based upon the quality of gold brought by the borrower, the following tests are conducted, as required, to determine the purity and net gold content:

• Hallmark Verification - Jewelry items are checked for hallmarking (e.g., 24K, 22K, 18K), which serves as a certified assurance of purity. Markings on jewelry also provide a preliminary indication of karat value.
• Density & Weight Method - Used to differentiate genuine gold from spurious or impure ornaments.
• Touchstone Method - Ornaments are rubbed on a touchstone; the gloss and colour help detect impurities. Coated or fake ornaments show variation in colour.
• Acid Test - Pure gold remains unaffected by standard acid tests, while impure metals show discoloration.
• Karatmeters (XRF Analyzers) - Deployed in select high-potential branches as an additional safeguard to accurately detect spurious elements and confirm karat purity.

After the above appraisal, stones, wax, enamel, beads, and other extraneous items are removed, and only the net weight of the pure gold content is taken for valuation.

2. Price Used for Valuation of Gold Collateral

• Gold accepted as collateral security is valued based on the reference price corresponding to its purity (carat).
• For this purpose, the average closing price of gold of the respective purity over the preceding 30 days, as published by the India Bullion and Jewellers Association Ltd. (IBJA), is adopted.
• This methodology ensures a fair, transparent, and uniform valuation across all branches.
• The same benchmark is used both for fixing the lending rate and for monitoring the LTV ratio.

3. Loan-to-Value (LTV) Ratio

• The Bank adopts LTV ratios depending upon the type of gold loan scheme subject to internal & regulatory guidelines.
• The LTV ratio for each scheme is reviewed periodically by the Bank in line with its credit policy, risk management framework, and regulatory guidelines.

Formula:

LTV Ratio (%) = ((Loan Amount ÷ Market Value of Gold) × 100)

• The calculation is system-driven in the Bank's Core Banking System (CBS), ensuring uniformity, transparency, and compliance across all branches.

4. Transparency & Disclosure

• The above methodology is applied uniformly across all Bank branches.
• Any changes to RBI guidelines, valuation methods, or Bank's internal LTV policies will be updated promptly on this website.
• Customers are encouraged to note that loan eligibility and LTV ratio vary depending on the specific gold loan scheme opted for, while remaining within RBI's overall regulatory framework.

JEWEL LOAN - GENERAL TERMS AND DISCLOSURES

A. DETERRENTS FOR DEFAULT:

a) In terms of directives in force now or as may be modified from time to time, default in repayment of instalments and/or servicing of interest for a notified period (presently 90 days) automatically results in categorization of all borrowal accounts as Non-Performing Asset (NPA). Such categorization renders the borrower ineligible from seeking (i) Additional/Ad-hoc credit facilities (Fund Based and/or Non-fund based), (ii) Waiver of overdue interest and (iii) Soft recovery measures. In case of Agricultural advances:

» A loan granted for short duration crops will be treated as NPA, if the instalment of principal or interest thereon remains overdue for two crop seasons.

»  A loan granted for long duration crops will be treated as NPA, if the instalment of principal or interest thereon remains overdue for one crop season.

For the purpose of these guidelines, "long duration" crops would be crops with crop season longer than one year and crops, which are not "long duration" crops would be treated as "short duration" crops

b)   Bank is under no obligation to consider the request of the borrower, if any, for additional Credit facility(ies) without a comprehensive review of the existing credit limits, operations in the accounts and past performance in meeting commitments such as servicing of interest charged to the Loan account(s), repayment of Loan instalments, etc., as applicable to the purpose for which credit facility has been extended.

c)   In the event of the borrower account being overdrawn without prior agreement or exceeding the agreed borrowing limit, the bank shall levy penal charges at the rates as specified from time to time.

B. REVISION IN MCLR/RLLR RATE AND CHARGING OF INTEREST:

a) &In case of borrower accounts where interest rate is linked to MCLR (Marginal cost of funds based Lending Rate), RLLR (Repo Linked Lending Rate) or where fixed interest rate is specified by the Bank, changes if any, in the Bank's RLLR/MCLR and/or fixed rate specified by the Bank, shall be conveyed through Press Report or Publicity through media/website of the Bank or a suitable 'Notice' placed in the banking hall of the branch and such mode of communication shall be construed as sufficient "Notice" to the borrower about the revisions effected in the interest rates.

b) The applicable interest rate/s will be charged with monthly, or such other rests as may be notified by the Bank from time to time.

c) The interest will be calculated and charged as per the daily balances, to the borrower account/s until the same is fully liquidated and the interest so charged will be paid by the borrower as per the terms agreed or as and when demanded by the Bank.

C. PENAL CHARGES: (As applicable now, and subject to revision from time to time)

*366 days in case of leap year

D. PREPAYMENT OF FACILITIES:

Foreclosure charges/pre-payment penalties will not be levied on all jewel loan schemes.

Copies of Loan documents executed, by the borrower, including loan agreement along with all enclosures quoted in the loan agreement shall be provided to all the borrowers at the time of sanction /disbursement which may be acknowledged.

F. END USE OF FUNDS:

Upon availment of credit facility on terms agreed, the borrower has to produce necessary documentary evidence for end-use and facilitate verification by the Bank. Bank shall closely monitor the end-use of funds and obtain certificates from borrowers certifying that the funds have been utilized for the purpose for which they were obtained.

In case of the wrong certification by the borrowers, Bank shall consider initiating appropriate legal proceedings, including criminal proceedings wherever necessary, against the borrowers.

H. Disclosure clause:

All the borrowal accounts with our Branch/ Bank will be subjected to the application of disclosure- norms prescribed by RBI.

I. CIC Clause: 

The information / data pertaining to all the borrowal accounts/guarantors/directors shall be furnished to Credit Information Companies such as Credit Information Bureau of India Limited (CIBIL) and other Agencies / Authorities, from time to time in terms of mandatory provisions in force.

J. INFORMATION UTILITY CLAUSE:

Financial information pertaining to all the borrowal accounts shall be submitted to Information Utility(ies) in terms of the Insolvency and Bankruptcy Code, 2016, Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 and under the terms and conditions and applicable Bye-Laws of the Information Utility of the choice of Indian Overseas Bank. Such information submitted by Indian Overseas Bank from time to time shall be verified and authenticated from time to time by the borrower(s)/ guarantor(s) in the mode and within the time prescribed by the information utility. Applicable charges shall be borne by the borrower failing which the same is recoverable from the guarantor.

K.  KYC GUIDELINES:

a) In terms of directives of RBI currently in force, KYC (Know Your Customer) guidelines are applicable and the required personal information / data as and when sought by the Bank should be furnished.

b) In case the borrower is a Company falling under the purview of the Companies Act, 1956, the release of Credit Facilities will be subject to the Company holding valid Corporate Identity Number (CIN) and all Directors of the Company holding "Director's Identification Number (DIN).

L. The company shall submit relevant declarations/documents as mandated by FATCA, 2015 in respect of Company & Company's directors.

M. Bank shall immediately report the incidents of fraud to Law Enforcement Agencies, subject to applicable laws if any as per RBI guidelines.

N. The decision to classify any account, either standard or NPA, as a red-flagged account shall be at Bank level and Bank shall report the status of the account on the Reserve Bank's CRILC platform immediately as per guidelines.

O. Penal Measures in Fraud Accounts:

If the Credit Facility/loan account is classified as red flag account, Bank shall appoint an external/internal auditor for investigation as its behest consequent upon red flagging of the account.

P. Pledged jewels are subject to auction as per Bank's discretion after following due procedure.

(i) Before the outstanding amount in the loan account exceeds the realisable value of jewels pledged.

(ii) Once LTV trigger is breached and even after third notice in case of Agricultural jewel loan or second notice in case of Non-agricultural jewel loans if the liability is not brought down within the stipulated LTV.

(iii)  Loan account becomes NPA by itself or the account may be linked to any other NPA account of the borrower.

a) When the jewel loan has become overdue or NPA or with LTV trigger shortfall and it has been decided to enforce the security a notice will be sent to borrower, notifying the intention to sell the gold ornaments pledged as security to the Bank.

b) Such a notice will be sent by Registered Post/speed post with acknowledgement due to all known addresses of the borrower as per Branch records.

c) If the notice issued by the Bank is refused by the borrower, it is kept unopened and held with the loan documents, so that it may be produced in Court, if necessary, as evidence of notice having been sent to the Borrower.

d) Branch publish the auction sale in two newspapers, one local daily newspaper preferably in vernacular having wide circulation in that area and one national newspaper 30days prior to the date of auction.

e) Branch conduct the first auction at the venue, date, and time fixed within the same district in which the branch is located and is conducted in the presence of respectable persons as witnesses. A full record of the auction duly signed by Manager & Second Line manager, authenticated by the witnesses is kept at the branch.

f) However, In case of failure of first auction, branch may conduct the auction in an adjoining district or conduct online.

g) Jewels relating to each loan is taken up for auction separately.

h) Where various items of jewellery are pledged by a party, the Branch shall auction only as many items of jewellery as are necessary to clear the liability and the remaining items are not to be auctioned.

i) The Borrower has the right to pay the dues to the Bank and redeem the jewels at any time before the jewels are auctioned.

j) In the event of non-repayment of the loan as per agreed terms, the Bank shall be entitled to auction the pledged jewellery. The Borrower shall be intimated of the auction particulars, including date, venue, and other relevant details, by Registered Post Acknowledgement Due (RPAD), in the format prescribed by the Bank (Annexure IV). Applicable charges for such intimation shall be recovered from the surplus of the sale proceeds, if any.

k) After completion of the auction, the Bank shall provide the Borrower(s)/legal heir(s) with full details of the auction, including the value realized and the dues adjusted.

l) Any surplus remaining after adjustment of the loan amount and applicable charges shall be refunded to the Borrower(s)/legal heir(s) within a maximum period of seven (7) working days from the date of receipt of the auction proceeds. Such refund shall be made either by credit to the Borrower's Savings Bank account or by issuance of an account payee Demand Draft.

m)  Upon full repayment or settlement of the loan, the pledged jewellery shall be released/returned to the Borrower(s)/legal heir(s) on the same day, and in any case, not later than seven (7) working days from the date of such repayment/settlement.

n) The Bank shall exercise reasonable care in custody of the pledged jewels/articles in accordance with applicable law, rules and guidelines. In the event of any loss or damage caused by theft, loss, or fraud (including decoy incidents), the Bank's liability shall be restricted to the value of the jewelry pledged, and the Bank shall not be liable for any indirect or consequential loss.

Q. Disclosures as per Reserve Bank of India Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances

Following are the terms and conditions of the Loan, as per the guidelines issued by the Reserve Bank of India ("RBI"), for illustration purposes:

a. "Dues" means, the principal/interest/any charges or any amounts agreed between the Borrower and the Bank from time to time levied on the Loan which are payable within the period stipulated as per the repayment schedule.

b. "Overdue" means, the principal/interest/any charges levied on the Loan which are payable but have not been paid within the period stipulated as per the repayment schedule. In other words, any amount due to the Bank in connection with the Loan is "overdue" if it is not paid on the due date fixed by the Bank.

c. The Principle of FIFO i.e., "First In, First Out" accounting method is relevant to arrive at the number of days of overdue for determining the SMA/NPA status. The FIFO principle assumes that the oldest outstanding dues under the Loan need to be cleared first. The FIFO method thus requires that what is due first must be paid by the borrower first.

d. The Bank shall recognize incipient stress in loan accounts, immediately on default¹, by classifying such assets as special mention accounts (SMA) as per the following categories:

^1'Default' means non-payment of debt (as defined under the Insolvency and Bankruptcy Code, 2016) when whole or any part or instalment of the debt has become due and payable and is not paid by the debtor. 

Example 1: If due date of a loan account is March 31, 2022, and full dues are not received before the bank runs the day-end process for this date, the date of overdue shall be March 31, 2022. If it continues to remain overdue, then this account shall get tagged as SMA-1 upon running day-end process on April 30, 2022 i.e. upon completion of 30 days of being continuously overdue. Accordingly, the date of SMA-1 classification for that account shall be April 30, 2022. 

Similarly, if the account continues to remain overdue, it shall get tagged as SMA-2 upon running day-end process on May 30, 2022 and if continues to remain overdue further, it shall get classified as NPA upon running day-end process on June 29, 2022.

Example-2: If due date of a loan account is September 15, 2024, and full dues are not received before the lending institution runs the day-end process for this date, the date of overdue shall be September 15, 2024. If it continues to remain overdue, then this account shall get tagged as SMA-1 upon running day-end process on October 15, 2024, i.e., upon completion of 30 days of being continuously overdue. Accordingly, the date of SMA-1 classification for that account shall be October 15, 2024.

Similarly, if the account continues to remain overdue, it shall get tagged as SMA-2 upon running day-end process on November 14, 2024 and if it continues to remain overdue further, it shall get classified as NPA upon running day-end process on December 14, 2024.

e. When there is a default in repayment by the borrower on the due date(s) mentioned in the repayment schedule or servicing of interest, beyond 90 (ninety) days or any other period stipulated by the Bank under the directives of the RBI, all loan/credit facilities shall be categorized as Non-Performing Assets (NPAs) and such categorization entails disqualification from seeking:

i. additional/ad-hoc credit facilities (fund based or non-fund based);

ii. waiver of overdue interest charges.

iii. waiver of overdue penalty charges

iv. softening recovery measures by the Bank, etc.

f. Loan accounts classified as NPAs by the Bank may be upgraded as "standard" asset only if entire arrears of interest and principal are paid by the borrower. In case the borrower has availed more than one credit facility from the Bank, the facility account shall be upgraded from NPA to "standard" asset category only upon repayment of entire arrears of interest and principal pertaining to all the credit facilities. An illustration of the movement of an account to SMA category to NPA category based on delay or non-payment of dues and subsequent upgradation to "standard" category at day-end processes is provided hereunder

Illustration of the application of Principle of "First In, First Out" in appropriation of payments into the loan account is as follows :

If in any loan account as on 01.02.2024 there are no overdue and an amount of Rs. X is due for payment towards principal instalment/interest/charges/other amounts, any payment being credited on or after 01.02.2024 in the loan account will be used to pay off the dues outstanding on 01.02.2024. Assuming that nothing is paid/or there is partial payment (Rs Y) of dues during the month of February, the overdue as on 01.03.2024 will be Rs X - Rs Y. Additionally, an amount of Rs. Z becomes due as on 01.03.2024. Now any payment/partial payment into the account on or after 01.03.2024 will be first utilized to pay off the partial due of 01.02.2024 (Rs X - Rs Y). If there is more recovery than the Rs X - Rs Y, then after recovering dues of 01.02.2024, the remaining amount will be treated as recovery towards due of 01.03.2024.