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Gold Loans

Gold loans are secured loans where the customer pledges gold ornaments and take loan against the pledge.

Gold Loans are given for both income generation and personal requirements and shall not be used for any speculative, illegal, or unlawful purposes that violate the laws of the country.

Any individuals in the age group of 21 to 75 years can avail gold loan provided he or she is the rightful owner of the ornaments they wish to pledge. The gold ornaments accepted as collateral must have a purity ranging from 18 to 22 carats. Ornaments below 18 carats will not be accepted. In the event that the purity of the ornaments is found to be less than 22 carats (but not below 18 carats), the lender shall determine the value of the gold by converting it into the proportionate value of 22-carat gold. Shall fulfil KYC norms and have cash flows to repay the loan.

Borrower will nominate one of his/her family members as Nominee. In case of any unfortunate event causing death of the applicant, Nominee can repay the loans and get the Gold Ornaments released from the pledge.

Customers are allowed to pledge only the Gold Ornaments belong to them. Ornaments stolen, borrowed are not allowed to pledge. Customer shall sign a declaration to this effect. Further ownership determination is done by collecting info related to Ornaments. Data points collected are, how the ornaments are acquired, which shop and location the Ornaments were purchased from etc., Due diligence will go up with the loan size increasing. In few cases, the employees visit the customer’s house, they check whether customer has own house or not.

Tenure ranges from three months to twelve months. While the loans are payable in bullet – at the end of the loan tenure, borrowers are advised to pay interest every month to get rebate in the interest rate and avoid the risk of not being able to accumulate required cash for repayment of loan – both principal and interest at once. Quantum of finance will be decided based on the net weight of 22-carat gold ornaments tendered as security, their purity, and in accordance with RBI guidelines. Minimum loan starts with Rs.1,000 and maximum can go up to Rs.1Cr. However depending upon the loan size, the loan sanction authority is delegated to the next level.

The interest rate may vary from 8% p.a. to 26% p.a. depending on the product, while the processing fee is at 0.25%. Mode of calculation and other factors considered are as follows:-

  • Interest rate will be quoted on annualized basis only.
  • Interest amount will be calculated on the daily outstanding balance in the loan account at the contracted rate.
  • All loans carry the fixed contracted rate till closure of account

In addition to interest, the Company may levy the following charges. The rate at which such charges are levied shall be decided by the ALCO –Committee empowered by the Board for fixing interest rates and other charges including Processing fee, Insurance, Token Charges, Penal Chrages, Auction Charges, Auction Notice Charges and Stamp Duty will be collected in states where it is mandated as per the Stamp Act/State government directives. Any other charges as decided by the ALCO- Committee empowered by the Board, which will be intimated to the customer upfront.

Loan-to-value (LTV) is the ratio of the loan amount to the appraised value of the collateral, typically expressed as a percentage.

The maximum Loan-to-Value (LTV) ratio should not exceed 75%, or as stipulated by the Reserve Bank of India (RBI) from time to time. The value of the gold ornaments will be calculated as 75% of the price of 22-carat gold, declared in compliance with the provisions of the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023. The purity of the gold ornaments in carats will be considered when calculating the value of the ornament, and adjustments for the actual carat purity will be made to arrive at the final value.

Before taking any loan to Auction, the re-pledge ability of the loan is verified taking into account the current Gold Price. As long as the total receivable amount including principal and interest are within the LTV limits, loans are re-pledged. In case these loans are beyond the permissible level of LTV, then the customer is given two options: 1. To close the loan and get the pledge released 2. In case the customer’s cash flows do not support, to settle the loan, then he / she is asked to make a part-payment so that the loan will come below the permissible LTV%. Auction being the last report, Customer is supported with various option including payment of interest every month though it is not due, part-payment of loan before loan maturity period etc.

If the customer is not able to close and make even part payment of loan and there has been persisting overdue, the ornaments are liable to be auctioned but only after giving sufficient notice to the borrower. The Lender serves a reminder to its overdue accounts apart from periodic SMS reminders to our customers to alert them to the overdue in the account. Moreover, we also send auction intimation prior to the auction. If the borrower doesn’t repay the loan the auction will be done in compliance with auction policy approved by the Board of Directors. The auction policy is available on the website of the company (https://keertanafin.in/investors/Policies)

The Company ensures the release of all securities held against a loan upon repayment of all dues or realization of the outstanding amount, subject to any legitimate right or lien for any other claim the lender may have against the borrower. If the company intends to exercise its right of set-off, the borrower will be provided with written notice containing full particulars about the remaining claims and the conditions under which the company is entitled to retain the securities until the relevant claim is settled or paid.

Our company is committed to maintaining transparency and fairness in its dealings with borrowers. In line with this commitment, we ensure that any changes in terms and conditions, including disbursement schedules, interest rates, service charges, and prepayment charges, are communicated to borrowers in a language they understand. Changes in interest rates and charges are implemented prospectively, meaning they will apply only to future transactions and will not affect existing loan terms. To enforce this practice, a clause regarding communication of changes in terms and conditions is included in all loan agreements, reaffirming our company's commitment to transparent and fair practices.

We cordially invite you to visit our nearest branch for comprehensive information regarding the array of products we offer. Alternatively, you may explore our offerings on our website at https://keertanafin.in for further details.

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