As per the gold loan auction process, a professional and independent auctioneer appointed by the financial institution must conduct this process. Further, the Board needs to approve this process, and the lender is not allowed to participate in such an auction.
Gold loan auction process
As per policies, an auctioneer must give a notice period of 15 days to a borrower before conducting an auction. Further, an auctioneer needs to send this notice via registered post.
An auction advertisement needs to be published in at least two local newspapers. An auctioneer must also make sure that an advertisement should be done in one newspaper that follows the borrower’s vernacular language while another in any national daily newspaper.
A borrower can release his or her gold asset by paying the whole outstanding gold loan amount till the last working day of the auction’s date. Also, a borrower must make the payment during the lender’s business hours.
As per gold auction rules, officials from the lending institutions must be present during the time of public auction.
Further, there must be a considerable number of bidders to conduct an auction.
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