What you need to know
If dues remain unpaid after maturity, the lender can auction the gold, but only after notices and a transparent public process set by RBI.
Auction rules (RBI 2026)
- Prior notice to the borrower before auction
- Public notice in at least two newspapers — one national, one regional-language
- Reserve price at least 90% of the current value (85% after two failed auctions)
- First auction in the same district; later ones in an adjoining district or online
- Surplus after recovering dues must be refunded to the borrower
- Full details of sale must be shared with the borrower
How to avoid auction
- Pay at least the interest to keep the loan standard.
- Renew at maturity or part-pay to reduce LTV.
- Talk to the lender early — many allow restructuring or extra time.
Frequently asked questions
Can the lender sell below market value?
No, the reserve price must be at least 90% of the current value (85% after two failed attempts).
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.