Gold Loan of Rs. 31.5 Lakh: Documents Required at a Bank and at an NBFC

There are two types of regulated lenders who offer loans against gold in India. They are banks and Non-Banking Financial Companies (NBFCs). Both of them are covered by RBI’s harmonized loan against gold guidelines via Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025. Therefore, it can be said that the fundamental documents required by both institutions are the same, although there might be some differences in document requirement based on the policy of the lender.

This guide explains the documents required for a gold loan of Rs 31.5 lakh, compares the bank and NBFC experience, and outlines the valuation and application process under the prevailing regulatory framework.

The File Common to Both

The LTV for a loan of ₹31.5 lakh comes in the highest LTV slab for gold loan in the present RBI guidelines. In view of the fact that the proposed loan is above ₹2.5 lakh, the general practice followed by banks is to do an assessment of repayment capacity. Since the proposed loan amount exceeds ₹5 lakh, PAN is generally required in accordance with applicable KYC, tax and regulatory requirements followed by regulated lenders.

Commonly requested documents may include:

1. Identity proof carrying a photograph, such as Aadhaar, Voter ID, Passport or Driving Licence
2. PAN card, generally required for higher-value loans in accordance with applicable regulatory and tax requirements
3. Proof of current address, such as Aadhaar, Passport or another acceptable address document
4. Recent passport-size photographs, where required under lender procedures
5. The gold jewellery or ornaments proposed as collateral for valuation and purity assessment

Because the loan amount exceeds ₹2.5 lakh, lenders may request income-related documentation as part of their repayment-capacity assessment. The exact documents accepted depend on the lender's credit policy and the applicant's profile.

Lenders may also seek declarations, supporting records or other information relating to ownership of pledged ornaments where required under their internal procedures. Additional documentation requirements, if any, depend on the lender's policies, loan amount and assessment requirements.

Bank and NBFC: Where the Process Differs

Note: All figures are indicative. Actual loan amounts, fees, eligibility criteria, repayment structures and coverage ratios may vary based on lender policy, applicant profile, product type and applicable regulatory requirements.

Interest rates, charges and accepted income documentation may differ across lenders. Product design, funding considerations, operational requirements and internal risk-management frameworks are among the factors that can influence these differences.

Gold and Eligibility

For higher-value gold loans, the sanctioned amount is linked to the assessed value of eligible collateral and the applicable loan-to-value framework. Under the current RBI framework, loans above ₹5 lakh are generally subject to a maximum LTV of 75%, subject to applicable regulations and lender policy.

The valuation of pledged gold is typically based on the benchmark methodology prescribed under RBI directions. This generally involves using the lower of:

• The previous day's closing benchmark price, and
• The relevant 30-day average benchmark price

published by the India Bullion and Jewellers Association (IBJA) or a SEBI-regulated exchange for the relevant purity of gold. The benchmark value is then adjusted for purity and net weight after excluding stones, fittings, lac and other non-gold components. Actual collateral requirements vary depending on benchmark prices, purity assessment, deductions and lender valuation procedures on the date of appraisal.

Eligibility criteria, including age, residency and ownership-related requirements, are subject to applicable regulations and lender policies.

Steps to Apply

1. A regulated bank or NBFC branch offering gold loans, or the lender's authorised digital channel where available, is generally where the application process begins.
2. The applicant submits identity proof, address proof, PAN, any income-related documents requested by the lender, and the jewellery proposed as collateral.
3. The ornaments are weighed and assessed for purity in the applicant's presence. Details such as purity, gross weight, net weight, deductions and assessed value are recorded through the lender's prescribed process.
4. The lender completes its verification and repayment-capacity assessment procedures and provides details of the proposed loan amount, interest rate, charges, repayment structure and tenure.
5. Once documentation, verification and approval requirements have been completed, the loan agreement is executed and disbursal is processed in accordance with lender procedures.

Upon full repayment and closure of the loan account, pledged gold is generally released in accordance with applicable regulatory requirements and lender procedures. Regulatory provisions may prescribe timelines and compensation requirements in specific circumstances involving lender-attributable delays.

How IIFL Finance Supports Gold Loan Applicants

IIFL Finance may offer a gold loan of ₹31.5 lakh, subject to product availability, borrower eligibility, collateral assessment, internal credit evaluation and prevailing regulatory requirements.

The gold valuation process is generally conducted in the applicant's presence. Applicable charges are disclosed before execution of the loan agreement, and pledged ornaments are held in custody until loan closure in accordance with applicable regulations and lender policies.

Disbursal, where approved, is made in accordance with applicable regulations, lender procedures and the borrower's designated bank account details.

Subject to applicable regulations and lender policies, funds obtained through a gold loan may be used for a variety of legitimate personal or business-related purposes, including:

• Machinery, equipment or production-related expenditure for an established business
• Business expansion, operational expenditure or other business-related requirements, subject to applicable laws, regulations and lender policy
• Vehicle-related expenditure associated with a business activity, subject to lender policy
• Personal commitments such as education-related or family-related expenses

Unlike a sale transaction, a loan against eligible gold collateral generally allows the borrower to retain ownership of pledged ornaments, subject to repayment obligations and the lender's applicable terms and conditions. The examples above are illustrative and do not constitute a loan offer.

Conclusion

The core documentation generally required for a ₹31.5 lakh gold loan is similar across banks and NBFCs, although specific documentation, verification requirements and assessment procedures may vary by lender. KYC records, PAN, collateral-related documentation and income-related documents requested as part of the lender's assessment process commonly form part of the application file.

The principal differences between lenders generally relate to operational processes, account handling, repayment mechanisms, pricing and product features. Valuation procedures, borrower disclosures, collateral management and release requirements operate within the same regulatory framework applicable to regulated lenders.

A gold loan may provide access to funds against eligible collateral while allowing ownership of pledged gold to be retained, subject to repayment obligations and applicable terms and conditions. Valuation procedures, disclosures and collateral handling are carried out in accordance with applicable regulations and lender policies.

Disclaimer : The information in this blog is for general purposes only and may change without notice. It does not constitute legal, tax, or financial advice. Readers should seek professional guidance and make decisions at their own discretion. IIFL Finance is not liable for any reliance on this content. Read more