| Particular | Details |
|---|---|
| Scheme Name | Financing Against Pledge of Gold Ornaments/Jewellery/Gold Coins for Agriculture and Non-Agriculture Purposes |
| Type of Facility | Loan against pledge of gold |
| Purpose | Agriculture and non-agriculture purposes |
| Security | Pledge of gold ornaments/jewellery/gold coins |
| Eligible Borrowers | Individuals and eligible entities as per PNB’s scheme conditions |
| Nature of Facility | Demand Loan / Cash Credit, as applicable |
| Loan Amount | Based on the value of eligible gold and applicable LTV |
| Margin | As prescribed by PNB |
| Repayment | Depends on the purpose and type of facility |
| Interest Rate | As per applicable PNB rate |
| Gold Valuation | Based on purity and applicable valuation methodology |
2. Eligible Gold
| Gold Item | Eligibility |
|---|---|
| Gold Ornaments | Eligible |
| Gold Jewellery | Eligible |
| Gold Coins | Eligible subject to scheme conditions |
| Sovereign Gold Bonds | Not the same facility – SGB financing is covered separately |
| Gold Bars/Bullion | Not generally treated as eligible pledged jewellery under this scheme |
The facility is specifically designed around gold ornaments/jewellery and eligible gold coins pledged with PNB.
3. Purpose of Finance
The scheme covers both agricultural and non-agricultural requirements.
| Purpose | Category |
|---|---|
| Agricultural activities | Agriculture |
| Allied agricultural activities | Agriculture |
| Personal requirements | Non-agriculture |
| Other permitted non-agricultural requirements | Non-agriculture |
The exact permissible end-use and loan structure depend on the category under which the loan is sanctioned.
4. Agriculture Gold Loan
For agricultural borrowers, the gold can be pledged to obtain finance for eligible agricultural requirements.
| Particular | Details |
|---|---|
| Purpose | Agriculture and allied activities |
| Security | Pledge of gold ornaments/jewellery/gold coins |
| Loan eligibility | Linked to value of eligible gold and applicable LTV |
| Repayment | Based on crop/repayment cycle and applicable facility |
| Interest | Applicable agricultural gold-loan rate |
5. Non-Agriculture Gold Loan
For non-agricultural purposes, eligible borrowers can obtain finance by pledging gold with PNB.
| Particular | Details |
|---|---|
| Purpose | Permitted non-agricultural requirements |
| Security | Pledge of eligible gold |
| Loan Amount | Based on assessed gold value and applicable LTV |
| Repayment | As per sanctioned facility |
| Interest | Applicable PNB rate |
6. Gold Valuation
The amount that can be sanctioned is not based simply on the market price of the jewellery.
PNB determines the value after considering factors such as:
- Purity of gold
- Net weight of gold
- Applicable gold valuation rate
- Exclusion of the value of stones and other non-gold components
- Applicable Loan-to-Value (LTV) ratio
Therefore, the borrower does not normally get a loan equal to the entire market value of the jewellery.
7. Important Point About Jewellery Valuation
For example, suppose jewellery weighs 50 grams, but it contains stones and other materials.
PNB will determine the eligible net gold content and purity and calculate the value accordingly. The value of diamonds, precious stones, making charges and other non-gold components is not treated in the same way as the underlying gold value.
8. Security
| Particular | Requirement |
|---|---|
| Primary Security | Pledge of gold ornaments/jewellery/gold coins |
| Possession of Gold | Gold remains with the bank during the loan period |
| Release of Gold | After repayment of the outstanding dues, subject to bank procedure |
The fundamental security for the facility is the pledged gold itself.
9. Repayment
The repayment structure depends on whether the loan is being used for agriculture or non-agriculture purposes and on the type of facility sanctioned.
| Facility/Use | Repayment |
|---|---|
| Agricultural purpose | As per applicable agricultural loan/crop cycle |
| Non-agricultural purpose | As per sanctioned repayment schedule |
| Demand Loan | Repayment as stipulated by PNB |
| Cash Credit | Interest/service and adjustment as per sanctioned terms |
10. Interest Rate
The applicable interest rate depends on the purpose of the loan, borrower category, facility and prevailing PNB lending rates.
Therefore, the exact rate should be checked against PNB’s current Retail/Agri gold loan interest-rate schedule at the time of applying.