Gold Loan

Gold has always been more than just jewellery for us - it's security, emotion, and tradition all have connected every Indians since generations. So, when we decide to pledge it for a Gold Loan, we want it to be placed in a safe custody that is the reason why we look for the authorised professionals to give our valuables the security which we want from it.

Whether you're pledging your gold for the first time or you've done it before, there are a few mandatory steps you should always check before trusting any financial institution with your precious ornaments.

This is the first and most important thing. Before you hand over your gold, make sure the lender is registered with the Reserve Bank of India (RBI) - either as a NBFC or a bank.

Why this matters: Dealing with unregistered lenders can put your gold and money at serious risk. You can verify this on the company's website or by checking the RBI registration certificate displayed at their branch.

Every regulated financial institution must follow Know Your Customer (KYC) norms. Don't skip this part - it's for your own safety.

You'll usually need:

• Aadhaar Card / Voter ID / Passport (for identity proof)
• PAN Card (especially for loans above ₹50,000)
• A recent photo and address proof

This ensures your loan is completely legal and transparent - no shortcuts, no risks.

Your gold's purity and weight decide your loan amount, so this step must be done in your presence.

Most genuine lenders use non-destructive testing machines like spectrometers or XRF testers. The value is then calculated based on the current market rate and the RBI's Loan-to-Value (LTV) limit - which is maximum 75% of your gold's value. Please ensure that all this test is conducted at your own presence.

Always insist on a transparent valuation slip before proceeding.

The various methods to check the category of the testing machine:

a) Look for the Machine Design and Label

Both Spectrometers and XRF Testers are usually desktop devices - compact, box-shaped, and often placed on a sturdy counter.

• They typically have a small chamber or lid where the gold ornament is placed for testing.
• The front or side panel will have a manufacturer label or model name, for example:
  • "Olympus DELTA XRF Analyzer"
  • "Thermo Scientific Niton XRF"
  • "Bruker S1 TITAN"
  • "Spectro Midex"
  • "FISCHERSCOPE XAN"

If you see "XRF," "Spectro," "Fluorescence Analyzer," or "Spectrometer" written on the body or screen - it's a good sign you're looking at a scientific-grade purity testing machine.

b) Ask the Valuer or Branch Staff

Don't hesitate to ask: "Can you please tell me which testing method or machine is being used - is it an XRF or spectrometer?"

A transparent financial institution or gold loan company will immediately show or explain the device and even share a printout or digital report generated by the machine. If they seem hesitant or say they use "acid testing" or "manual rubbing," that's not a modern or reliable method.

c) Avoid "Acid Test" or "Touchstone" Methods

Older methods involve:

• Scraping gold on a black stone (touchstone)
• Applying acid drops to test purity

These methods are not accurate, can damage the ornament, and are not allowed by most RBI-compliant NBFCs anymore. Always prefer non-destructive testing (NDT) — which XRF and Spectrometer machines provide.

d) Ask for a Purity Test Printout

A real XRF or spectrometer machine gives a digital report or printout slip that includes:

• The karat value (e.g., 22K, 18K, 24K)
• Composition breakdown (like percentage of gold, silver, copper, etc.)
• Timestamp and device ID / serial number

This is proof that a genuine electronic purity test was conducted.

e) Observe the Process

• The ornament is placed inside a closed testing chamber or under a small scanner window.
• A light or beam flashes for a few seconds (this is the X-ray or laser).
• The reading appears on a digital display or computer screen.
• The entire process takes less than a minute and does not scratch or harm the ornament.

Yes, it can look like a lot of paperwork, but it's your protection.

Before signing, make sure the Gold Loan Agreement clearly mentions:

• The loan amount and interest rate
• Repayment schedule
• Any processing or prepayment charges
• What happens if you miss payments (auction terms, etc.)

If something's unclear, ask questions - a good lender will always take time to explain.

Once you pledge your gold, it should be sealed in your presence, properly labelled, and stored in a fire-proof, CCTV-secured vault.

Also confirm that the gold is insured - this protects you in case of theft or any unforeseen damage.

Always collect a pledge receipt with details of your ornaments (weight, purity, number of pieces, etc.). It's your proof of ownership.

A professional lender will let you repay or renew your loan without any hidden conditions. Once you repay in full, the release process should be quick and done right in front of you.

Before leaving, always open and verify your ornaments to make sure everything is intact.

In case of non-payment, lenders are legally allowed to auction the pledged gold. But remember, they must give you written notice - at least 14 days before.

If your lender skips this, it's a violation of RBI guidelines. So, always stay informed and communicate with your lender in advance if you face any repayment difficulty.