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ADVANCES ON PLEDGE OF GOLD ORNAMENTS
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1) The Gold Contral Order issued by the Government of India under the Defence of India (Amendment) Rules, 1963, has placed certain restrictions and advance, against gold other than gold ornaments. In view of this order, no advance should be made against gold other than ornaments.
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2) Gold ornaments should be the property of the person who would borrow thereagainst. An undertaking should be obtained from the borrower stating that he/she is the sole owner of the gold ornaments to be pledged to the Bank. If there are suspicious circumstances, no loan should be granted.
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3) The Bank shall dissent to grant loan to a borrower against pledge of ornaments of third person.
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4) Gold ornaments are to be got appraised by the appraiser appointed by the Bank.
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5) The Board of Directors shall instruct, in writing, the appraiser to value the ornaments at the rate decided by the Board from time to time. Usually the rate shall be less than the market price of gold. The margin as decided by the Board shall be maintained.
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6) The gold ornaments shall be valued by the appraiser in the presence of manager and borrower (pledger) and a Memorandum of pledge showing the details of ornaments, weight gross and net and their amount of valuation shall be signed by the appraiser and handed over to the Manager.
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7) The ornaments after appraisal by the appraiser should be placed in a transparent bag of adequate size and a stiff paper mentioning thereon the name of the borrower, account number, amount of advance, number of ornaments, date of advance etc, should be fastened to it to facilitate easy checking. A duplicate of the same paper should be placed inside the bag so that, in case outside ticket is removed or lost by constant checking, the ornament shall be indentified by the inside ticket.
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8) Documentation : The following documents shall be taken
i) Demand Promissory Note.
ii) Continuing Security Letter.
iii) Letter of Lien and Set Off.
iv) Agreement of Pledge.
v) Particulars of Borrower mentioning source of income, occupation etc.,
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9) After checking the loan papers and other relevant documents, the Manager/Branch Manager/authorized Officer shall pass the payment under a letter of acknowledgement showing the pledge of gold ornaments to the Bank and amount of advance, due date of the loan etc shall be given to the borrower.
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10) The Gold ornaments should be placed in the safe locker in strongroom, under double lock system of the Manager and the other authorized Officer. The bags of ornaments should be placed in a systematic order so as to recognise them easily on repayment.
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11) On repayment of the loan and surrender of letter of acknowledgement, the ornaments should be handed over to the borrower. Borrower’s signature and receipt of gold ornaments should be invariably taken in the concerned register.
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12) Part redemption of ornaments shall be avoided as for as possible. However, when part redemption is made, an acknowledgement in register giving particulars of ornaments delivered, gross and net weight and assessed value and relative payment of dues should be got signed by the borrower and initiated by the Manager.
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13) In case by death of the pledger, the nominee shall be entitled to take delivery of ornaments if the loan amount is fully repaid with interest and any charges. The nominee should produce death certificate of the borrower and letter of acknowledgement. A person wellknown to Bank as well as to nominee, preferably member, should sign the letter of identification of nominee.
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