Loan Policy

Product Overview

Our flagship product, the Gold Loan, enables customers to unlock the value of their gold ornaments to meet short term financial needs quickly and conveniently. As a result, customers can access funds without selling their jewellery. The loan is sanctioned as a demand loan, with pledged gold jewellery serving as collateral security.

Who Can Apply?

To be eligible, an individual must be the lawful owner of household gold ornaments and must satisfy RBI’s KYC requirements. In addition, the borrower is required to submit a declaration of ownership at the time of pledge.

Purpose of the Loan

Gold loans at Sai Gold OGL can be used for a wide range of legitimate financial needs, including:

• Working capital for business establishment or expansion
• Personal liquidity requirements
• Domestic needs such as medical expenses, education, or family events

However, loans must not be used for speculative, illegal, or unlawful purposes.

Loan Tenure

Generally, all gold loans are sanctioned for a maximum tenure of 12 months, unless otherwise specified under a particular scheme.

Loan Amount

The loan amount is determined based on the net weight of 22 carat gold ornaments tendered as security, their purity, and the Loan to Value (LTV) ratio prescribed by RBI from time to time.

• Minimum loan amount: ₹1,500 per pledge
• Minimum gold weight: 1 gram (net weight)
• Minimum disbursement: At least 25% of the eligible loan amount must be availed

Gold Purity and Weight Assessment

Only gold ornaments with a minimum purity of 22 carats are accepted as security. During the assessment process, the gross weight of the jewellery is verified, and the weight of embedded stones, pearls, diamonds, coral, or other non gold materials is deducted to arrive at the net weight used for loan calculation.

Moreover, if the gold is found to be below 22 carats, the Company may proportionately convert the weight to equivalent 22 carat weight at its discretion.

Ownership of Gold

Before disbursing any loan, branch executives verify the borrower’s ownership of the pledged gold. Accordingly, a declaration of ownership is collected from every customer.

Further, for pledges exceeding 20 grams, whether at one time or cumulatively, the borrower must specify how ownership was acquired, such as through inheritance, purchase, or gift. Third party pledges are permitted only when supported by a notarised Power of Attorney.

Items Not Accepted as Security

The following items are not accepted as collateral for a gold loan:

• Gold coins, gold bullion, melted bars, or primary gold
• Jewellery belonging to temples, churches, or other religious institutions
• Items for which the borrower cannot establish ownership
• Items included in Sai Gold OGL’s internal negative list, updated periodically
• Items not permitted under RBI guidelines

Certificate of Purity

Finally, a Certificate of Purity is incorporated in the Sanction Letter issued to each borrower for the limited purpose of determining the maximum permissible loan amount and establishing a reserve price in case of auction. The certificate is based on the borrower’s declaration and standard verification methods. Therefore, no disputes or claims based solely on this certificate will be entertained by the Company.

Interest and Charges

Interest rates are governed by Sai Gold OGL’s Board approved Interest Rate Policy. Rates are determined based on the cost of funds and risk gradation, where higher risk attracts a higher rate, within the maximum lending rate set by the Company.

Key interest calculation norms:

• Interest is calculated for the actual number of days the loan is outstanding.
• For schemes with an effective rate above 11%: a minimum of 7 days’ interest applies if the loan is closed within 7 days.
• For schemes with an effective rate of 11% or below: a minimum of 15 days’ interest applies if the loan is closed within 15 days.
• A minimum interest charge of ₹50 applies if the calculated amount is lower.
• Interest is calculated on a monthly compounding basis, with a year reckoned as 365 days.
• If an interest due date falls on a Sunday or public holiday, the Company may allow payment on the next working day without a slab change.

Penal Charges

If a borrower fails to repay the loan by the due date, penal charges, as decided and communicated upfront by the Company, will be levied over and above the regular interest rate for the overdue period. These charges are clearly disclosed in the loan agreement and Key Fact Statement (KFS). Penal charges are not capitalised, so no further interest is computed on them.

Other Charges

In addition to interest, the following charges may be levied as applicable and approved by the Board:

• Security charges
• Processing charges
• Service charges
• Documentation charges
• Lost token charges
• SMS charges
• Auction expenses
• Cheque re-issue charges
• Dormancy charges
• Part release charges
• Transaction charges (under specified schemes)
• Stamp duty (in states where mandated)
• Any other charges as decided by the Board, intimated to the customer upfront

Documentation Required

The following documents are required to avail a gold loan:

• Completed loan application form
• Demand Promissory Note and Take Delivery Letter
• Terms and Conditions Letter with borrower declarations
• Aadhaar consent for eKYC authentication with UIDAI
• Any one Officially Valid Document (OVD) as identity and address proof, as specified by RBI, such as Passport, Driving Licence, Voter ID, or Aadhaar Card.

KYC documentation requirements are subject to change as per RBI Master Directions from time to time.

Safekeeping of Pledged Jewellery

The safety of every customer’s pledged gold is our highest priority. All branches are equipped with:

• Strong rooms or FBR-rated safes
• Armed guards or watchmen at vulnerable branches
• Burglar alarms, CCTV cameras, and other security devices
• Comprehensive insurance cover against burglary, fire, and natural calamities

Gold ornaments are packed securely in individual packets with weight slips and stored in the strong room. The adequacy of safety measures and insurance cover is reviewed on an ongoing basis.

Release of Jewellery

Pledged jewellery is released to the same customer upon full payment of all dues, including principal, interest, penal charges, and other applicable fees. Release is processed only after verifying the borrower’s signature, original KYC documents, and the original pawn ticket (token). Biometric and OTP authentication are also used as additional security measures.

If the token is lost, an indemnity on stamp paper of the required value must be submitted before release. In the case of a deceased borrower, ornaments are released to legal heirs as per the Company’s procedures for settling deceased loan accounts.

Loan-to-Value (LTV) Monitoring

Sai Gold OGL actively monitors LTV ratios to manage risk in a falling gold price environment. Our tiered alert system ensures borrowers are informed and given opportunities to regularise their accounts:

• LTV breach above 80%: SMS alert sent to the customer requesting remittance of the differential amount.
• LTV breach above 85%: Ordinary notice sent requesting regularisation.
• LTV breach above 90%: Registered notice sent requesting repayment or pledge of additional gold.
• LTV breach above 95%: Recall notice issued, informing the customer that auction may be initiated if the loan is not repaid.

Fraud Prevention

Any fraudulent activity, whether by employees or outsiders, must be reported to management immediately. Attempts to pledge stolen or spurious gold must be reported to the Chief Vigilance Officer and the local police without delay. The Company maintains insurance coverage against staff fraud and pledging of spurious or stolen gold.

Auction

If a gold loan remains unpaid after the due date and all reminder communications have been sent, the pledged ornaments will be auctioned after a minimum of 14 days’ prior notice. The auction is announced publicly through advertisements in at least two newspapers, one in the local vernacular language and one national English daily. Full auction procedures are governed by Sai Gold OGL’s Board-approved Auction Policy. Any surplus realised after adjusting all dues is refunded to the customer. GST as applicable will be recovered from sale proceeds.

Staff Training

All employees joining Sai Gold OGL receive training in gold purity assessment methods as part of their induction. Regular refresher programmes are conducted to keep the team updated with the latest appraisal techniques and compliance requirements.

Branch Inspection and Audit

All branches are periodically inspected and audited by our internal audit team. Random verification of the quantity and purity of pledged gold ornaments is conducted, along with audits of accounting procedures, to ensure strict adherence to Company guidelines.