Professional Documents
Culture Documents
RISK MANAGEMENT:
Risk management refers to the practice of identifying potential risks in
advance, analyzing them and taking precautionary steps to reduce/curb the risk.
GOLD LOAN:
Gold loan or loans against gold is the easiest and quickest way for serving
financial needs. The gold is required to be pledged to avail loan. The loan amount is
determined on the gold pledged and the prevailing market price.
DCB Bank is a modern emerging new generation private sector bank with 130 plus branches
across 17 states and 2 union territories. It is a scheduled commercial bank regulated by the
Reserve Bank of India. It is professionally managed and governed. DCB Bank has
contemporary technology and infrastructure including state of the art internet banking for
personal as well as business banking customers.
At DCB the gold loan segment is classified as:
Gold Loans
term loans
over drafts
EMI's
Term loans:
A loan from a bank for a specific amount that has a specified repayment schedule and a floating
interest rate. Maturity level of term loan is less than a year.
Due to technical difficulties this term loan segment has removed as the client cannot access to
account after the tenure of loan
Overdrafts:
The loan amount is granted and is withdrawn only as per the requirements of the client and
interest is only charged only on the amount withdrawn.
EMIS:
A fixed payment amount made by a borrower to a lender at a specified date each calendar month.
Equated monthly instalments are used to pay off both interest and principal each month, so that
over a specified number of years, the loan is paid off in full.
Features of loan:
1.
2.
3.
4.
5.
6.
1. Ownership of ornaments:
Measures:
Bank would obtain a declaration from the borrower that the ornaments
are his own property and that he has the fullest right to pledge them to
the bank
In case, if sreedhan is being pledged declaration form of respective
person is to be submitted.
2. Appraiser:
Measures:
3. Valuation report:
Measures:
All the pledged items are recorded and duly sealed in presence of client
and two custodians in presence of operations manager.
4. Security:
Before granting any loan banker have to scrutiny the client in order to
prevent him using bank intentionally or unintentionally for criminal
purpose.
Measures:
5. Default risk;
In case if client is not in a position to repay loan then the gold is auctioned after
giving appropriate prior notices.
As the gold prices vary from time to time the loan amount is required
to be revised appropriately.
If gold prices decrease then bank is at a risk as it has valued gold more
than its value.
In order to avoid this banks usually revise the account every year based
on prevailing gold prices.