Recovery process:
Auction:
In the event, borrower fails to settle the loan Account or repay interest/ instalments /Principal Amount /any other amount, charges ("the total Outstanding"), post the completion of Loan tenure or otherwise, company shall issue the notice at borrower address given in this Application by giving 10 days time from the issue of the notice to borrower for repayment of the total Outstanding. In the event, borrower fails to repay the total Outstanding even after giving 10 days notice for repayment, borrower Pledged Gold Articles may be sold by company in a Public Auction as per RBI policy. The Auction will be announced to the Public by way of the issue of the Advertisement in at-least two newspapers of which at least one newspaper shall be of a vernacular language and another shall be a national daily newspaper.
If any of the Pledged Articles are sold at a price lower than the amount due from borrower, borrower shall pay the deficit amount to company. In case default in repaying the deficit amount by the borrower, company has all the right to initiate legal action against the borrower and take possession of all the movables and immovable property belonging to borrower. If the Pledged Articles are sold at a higher price than the amounts due from the surplus amount if any, may be refunded to borrower after adjusting all the other amounts payable by borrower to company. If losses are incurred on sale, the same shall be reimbursed by borrower to company and in the event borrower is unable to make good such losses, company may institute legal proceedings to recover the losses from borrower’s assets/property. Company shall not be responsible for any loss or costs incurred for selling the same if caused by such sales of Pledged Articles.
Company reserves the right to sell any of the Pledged Articles by auction at any point of time, even before the expiry of 6 months, if company is convinced that the market price or the maximum realizable value by sale of the Pledged Articles, is likely to come down below or equal to the total amount payable by borrower, by way of principal, amount of the Loan interest and other amounts payable in respect of the Loan, after serving a notice of 10 days to borrower at his address given in this Application.
A few checks and balances are to be followed:
i. The principles governing the public auction are adhered to.
ii. Adequate care is to be taken to prevent the bidders from forming a ring/ group and to ensure free and fair auction.
iii. In case there is a suspicion of formation of a ring by the bidders or that the final bid is not a fair price for the security auctioned, the auction proceedings may be postponed cancelled after due intimation to all the parties present and concerned.
iv. All papers connected with the auction proceedings such as the copy of registered notice issued to the borrower, auction sale notice, news paper publication, attendance of bidders etc is to be kept on record for future reference.
v. Minimum bid price for auction of gold needs to be determined before the auction starts.