ICICI Bank to auction 11-kg pledged gold to recover loans

The country's largest private sector lender ICICI Bank will auction this month gold jewellery weighing over 11 kg, pledged by more than 150 borrowers, who have defaulted on their payments.

The auction would be conducted by the bank’s branches in Uttar Pradesh, Bihar and Uttarakhand from April 18-22 for gold jewellery deposited by about over 150 customers as collateral for their loans, the bank said in a public notice last week.

While neither the exact value of the gold ornaments being auctioned nor the outstanding loans could be ascertained, an equivalent amount of gold would be worth over Rs 3 crore at current prices.

At present, gold prices have hit a one-year low at Rs 28,350 per 10 gm.

It is a usual practice to take gold loans by pledging jewellery with banks. But such ornaments can be auctioned by banks after giving sufficient notice to the borrower in case of payment defaults.

The notice further said: “In the event any surplus amount is realised from this auction, the same will be refunded to the borrower concerned, and if there is any deficit post the auction, the balance amount shall be recovered from the borrower through appropriate legal proceedings.”

The bank said the auction would take place at ICICI Bank branches in areas, including Allahabad, Meerut, Kanpur, Agra, Rudrapur, Varanasi, Dehradun, Bhagalpur and Patna.

ICICI Bank would auction gold jewellery weighing 8.5 kg on April 18, nearly 2kg on April 20 and around 940 gm on April 22.

Interested parties are required to submit a refundable security deposit of Rs 20,000 at ICICI Bank for participating in the auction process, the notice said.

In case the winning bidder refuses to accept the jewellery after the auction, then the security money would be forfeited, it added.

Last month, the bank had auctioned gold jewellery weighing nearly 25 kg worth over Rs 7 crore.