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Introduction
As per the Reserve Bank of India, (Non-Banking Financial Companies-Responsible Business Conduct) Directions, 2025 updated as on November 28, 2025 advise NBFCs to put in place an auction process duly approved by the Board of Directors. This auction process replaces the earlier auction process and all instructions issued thereunder.
What is a gold auction and how does it work?
An auction is a public process where an item is sold to the highest bidder in a transparent and regulated manner. In the case of a gold loan against your gold collateral such as jewellery, coins or ornaments, the pledged gold collateral may be auctioned only if the borrower fails to repay the outstanding loan amount on time as per the agreed terms. Gold loan auction involves realization of the value of gold collateral pledged by the defaulting borrowers as defined in the “Events of Default” after providing adequate prior notices.
BFL could exercise the right of recovery by conducting auction. Prior to the auction, the defaulting borrowers will be contacted through various means of communications as well as by issuance of default and auction notices, requesting them to pay the outstanding dues and with clear communication that BFL will initiate auction of the gold collateral pledged in case on non-payment. After expiry of the notice period, public notice will be issued in line with RBI guidelines, vide newspaper advertisement in at least two newspapers, one in Vernacular language and another in national daily newspaper inviting bids for participating in the auction.
With a view to expedite recovery of loan outstanding dues, the process is designed in such a manner that the auction will be completed within a time bound manner.
Why do banks and NBFCs conduct gold auctions
Banks and Non-Banking Financial Companies (NBFCs) conduct gold loan auctions when borrowers fail to repay the loan within the agreed time frame. When a gold loan is taken, the borrower pledges their gold collateral as security. If the borrower defaults or the required LTV is not maintained, the lender has the right to recover the amount by selling the pledged gold collaterals. The process of selling is typically done through a gold loan auction.
These auctions are a way for banks and NBFCs to recover their money without going through lengthy legal procedures. A gold auction notice is issued before the auction to inform the borrower and put up a public notice about the upcoming sale. It provides details about the auction process, date, and location.
Gold auctions offer a transparent way for lenders to sell defaulted gold, ensuring that they can recoup their losses.
Debt management strategy and triggers
In loan against gold collateral, we mostly encourage customer to pay interest and principal through our digital properties which is our application and website. Customers are educated on the same while onboarding itself on how to use and how to view the details.
Debt management activities shall commence upon maturity of the loan availed by the customer.
- Periodic SMS intimation
SMS alerts shall be sent to customers at regular intervals, informing them of outstanding principal and accrued interest. - Post-maturity physical communication
A physical letter shall be sent to the customer upon loan maturity, requesting repayment of outstanding principal and interest. - Pre-auction intimation
In case of continued non-payment, a formal communication shall be issued to the customer informing them of initiation of the auction process. - Public auction advertisement
Details of the auction, including date and other relevant information, shall be published in at least one regional newspaper and one national daily for accounts eligible for auction. - Final auction intimation letter
A final auction notice shall be issued to the customer prior to the auction, specifying the auction date, outstanding dues, and last opportunity for repayment.
In case the customer does not clear the outstanding dues post the above steps BFL conducts collateral auctions as per below auction process.
How to check gold auction notices online
Checking gold auction notices online has become easier with the increasing digitalisation of auction systems by banks and NBFCs. A gold auction notice provides important details about upcoming gold auctions, including the date, time, venue, and list of items being sold. To find these notices, begin by visiting the official websites of banks or NBFCs, where they often post auction announcements. You can find them in the "public notice" or "auction" sections of these websites.
These notices are typically published several days before the auction, giving potential bidders enough time to review the items available and prepare. Some gold loan auctions are conducted in physical locations, while others have moved online, making it easier for individuals across the country to participate. The auction notice will contain instructions on how to participate, including whether the auction is live in person or held on an online platform.
In addition to official websites, gold auction notices can also be found through financial news websites, local classified portals, or even newspapers in some cases. Tracking such notices ensures that you do not miss an opportunity to participate in gold loan auctions and acquire valuable gold items at competitive prices. Always ensure you are dealing with trustworthy sources to avoid fraud.
Process for auction of gold jewellery
When a loan remains unpaid beyond the stipulated repayment period in accordance with applicable regulatory norms, it may be classified as a Non-Performing Asset (NPA).
Before the gold collateral auction, borrowers who are unable to pay back the loan are contacted through SMS, Interactive Voice Response (IVR), voice calls, and default and auction notices. The notice requests the borrowers to pay the outstanding dues. It also states clearly that if the money is not paid, Bajaj Finance Limited will start the auction of the pledged gold collateral. After the expiry of the notice period, the company issues the notice in line with RBI guidelines. The notice is then put in at least 2 newspapers, one in a local language and one in a national daily newspaper. These advertisements call for bids from people who want to take part in the auction.
The process is set up so that the auction ends within a certain amount of time. This is done so that loan payments can be collected more quickly.
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Rules for gold loan auctions
Gold loan auctions follow a set of rules that ensure transparency and fairness during the sale of pledged gold. These rules protect both the lenders and potential buyers. Typically, if a borrower defaults on a gold loan, the lender will initiate the auction process to recover the loan amount. Here's a quick overview of key gold loan auction rules:
- Notice period: Before the auction, a gold auction notice is issued, giving enough time for the borrower and potential buyers to prepare.
- Valuation of gold: The gold pledged is evaluated based on purity and weight, which determines its reserve price for the auction.
- Bidding process: The auction can either be conducted physically or online. Participants place bids based on the market price of gold.
- Minimum bid: The minimum bid is usually set by the lender to recover the loan amount.
- Payment terms: The highest bidder is required to make full payment within a stipulated period.
- Gold auction today: Always check for live updates or upcoming auctions to stay informed.
Following these gold loan auction rules ensures smooth and transparent transactions, protecting the interests of all parties involved.
Appointment of auctioneer for gold auction
The auction shall be conducted by auctioneer, as per the following guidelines:
• Applications can be invited for empanelment as Auctioneer from established and reputed auctioneer/ auctioning agencies;
• Applications will be screened and the auctioneers will be selected;
The auction may also be conducted by trained BFL employees, in accordance with internal policies and regulatory guidelines.
Role of auctioneer in gold auction
The auctioneer will act as a facilitator to enable smooth functioning of auctioning process by performing the below role:
• The auctioneer is responsible for the conduct of auction in a fair and transparent manner.
• The auctioneer to ensure that the bidder submits duly filled in application forms along with earnest money deposit in accordance with auction terms.
• The auctioneer will encourage competitive bidding and ensure that the bid value is as per prevailing regulatory norms.
Place of auction for gold auction
The first auction shall be physically conducted in the same district in which the branch that has extended the loan is located. In case of failure of first auction, subsequent auction may be conducted in same district or adjoining district or through online mode.
Facilities at gold auction centre
To ensure a smooth and efficient auction, centres should have enough staff, the necessary equipment, and appropriate infrastructure. To ensure a smooth and efficient auction:
- Necessary equipment: Weighing machines and, if needed, purity analysers.
- Secure storage: A safe or strong room for storing gold.
- Proper documentation: All necessary registers and document formats.
- Essential personnel: A nominated person from Recovery, Operations, Credit, or Audit present during the auction.
Understanding gold loan default and auction process
Any one of the following events or situations, or a combination of them, will be considered an event of default:
- If the Borrower fails to pay the Outstanding Dues on or before the Due Date or commits breach of any of the terms, covenants or conditions contained in the gold loan documents
- If the required margin is not maintained; it should be ensured that BFL must be covered fully in value of collateral offered by the Borrower for the principal and the accumulated interest, and one of the triggers would be where the margin falls below 15%
- If the gold collateral deposited is found to be fake, defective, stolen, spurious or of an inferior quality.
- If the Borrower commits an act of insolvency or if the Borrower is adjudged or declared insolvent or bankrupt or if a liquidator, receiver or official assignee is appointed in respect of any property or estate of the Borrower
- If the Lender, for any regulatory or other reasons, is unable or unwilling to continue the Loan.
- If the Borrower defaults in payment of any other loan with the Lender or any other creditors
- If any representations or statements or particulars provided in the Application Form and/or under the Loan Documents are found to be false, misleading or incorrect.
If there exist any circumstances which in the opinion of the Lender jeopardizes the Lender’s interest.
Procedure for gold auction
The auction process incorporates auction of the gold collateral pledged by the Borrower in the event of default by the Borrower(s), as enumerated under “Events of Default” as mentioned above. In the event of occurrence of an event of default, BFL may initiate the auction process.
The Borrower shall have the right to redeem the pledged gold collateral by paying the outstanding dues along with applicable charges at any time prior to completion of the auction.
The auction process involves following steps:
i. Communication to borrower(s)/legal heir(s) in case of default
a. In the event of default in repayment of the loan or interest, a Default Notice shall be issued to the borrower(s) / legal heir(s) at the address recorded in the Loan Application Form or any updated address duly intimated to the NBFC. The notice shall be dispatched after a minimum period of fifteen (15) days from the date of maturity, through speed post or registered post.
b. In the event the borrower(s) / legal heir(s) fail to repay the outstanding dues despite issuance of the Default Notice, BFL shall issue an ‘Auction Intimation Notice’ upon expiry of twenty-one (21) days from the date of such Default Notice, explicitly informing them of the proposed auction of the pledged gold collateral.
ii. Communication to borrower(s)/legal heir(s) in case of margin breach
a. In the event of a margin shortfall arising due to (i) downward movement in gold prices, (ii) upward revision in applicable interest rates, or (iii) identification of fake, defective, spurious, or inferior quality collateral during internal checks, BFL shall notify the borrower(s) / legal heir(s) to regularize the shortfall within seven (7) days from the date of such occurrence. Such intimation shall be provided through appropriate communication channels, including SMS, IVR, and voice calls.
b. If the borrower(s) / legal heir(s) fail to settle the dues within the period specified in the Intimation Notice, an ‘Auction Intimation Notice’ shall be issued within seven (7) days from the date of such Intimation Notice, informing the borrower(s) / legal heir(s) about the initiation of the auction of the pledged gold collateral.
‘Auction Intimation Notice’ is served to realize any and all amounts outstanding under the Loan along with incidental expenses which will include all the costs/expenses (e.g. auction expenses, legal expenses, taxes, etc.) and the shortfall connected therewith. Also, the ‘Auction Intimation Notice’ will explicitly mention that in the event the realized value is not sufficient to discharge the outstanding under the Loan as mentioned hereinabove, BFL will initiate appropriate legal proceedings against the Borrower.
The Auction Intimation Notice shall mention the date, time and place of the auction.
The said notice(s) mentioned herein above will be sent to the Borrower(s) through India Post or by Courier with proof of dispatch.
Note: For all notices sent by BFL through India Post, in case the acknowledgement is not received or returned by the postal authority, it will be assumed that the notice is deemed to be served on the addressee within 4 (four) days from the date of dispatch.
iii. Advertisement for conducting auction for due date breach cases:
a. Advertisement for conducting Auction for Due date breach cases: Intimation for the auction of the gold collateral will be published in two newspapers i.e. one in the local newspaper in vernacular language and another in a national daily newspaper, about the proposed auction sale of the pledged gold collateral. Auction Notice should include a clear mention about the date, time and place of proposed auction; the loan number material terms and conditions of the auction sale; specify that the sale of pledged gold collateral is on an “as is where is basis”; state that BFL reserves the right to refuse any or all bids and/or to defer/withdraw the auction without assigning any reason to the bidders at any time during the process of the auction sale.
b. If BFL cannot trace the borrower or legal heirs despite best efforts and a public notice, it will proceed with auction after one month from date of public notice.
iv. Guidelines to conduct auction:
The auction shall be conducted, as under:
- The pledged gold collateral will be displayed to auctioneers as per the pre-approved terms and conditions.
- BFL or its On Roll employees shall NOT bid in the auction held.
- BFL or its related parties shall not participate in the auctions to ensure that there is no potential conflict of interest.
- BFL will fix a minimum amount to be recovered from the bidding of each pledge based on the valuation of gold collateral. Recoverable amount includes the principal and interest outstanding under the Loan as well as all the costs, expenses including notice and auction expenses and shortfall connected therewith.
- BFL shall declare a reserve price for the gold collateral at the time of auction, which shall not be less than 90 per cent of its current value: Provided that in case auctions fail twice, a reserve price not less than 85 per cent of its current value shall be adopted
- While conducting the auction BFL’s official should endeavour to realize the full market value for gold collateral pledged on the day of auction. BFL’s branch staff shall satisfy themselves with the identity of the bidders participating in the auction by collecting their KYC documents for gold loan (e.g. PAN Card, Driving License, etc.).
- All participants of the Bid will have to pay certain amount (as may be decided on case to case basis) as Earnest Money Deposit (EMD). EMD shall be refunded to unsuccessful bidders within 7 working days.
- Surprise visits will be conducted by regional/ controlling officials on periodic basis, coverage under internal audit, etc. for controls and process adherence.
The sale shall be concluded in favor of the highest bidder.
v. Documentation of auction event:
The auction process shall be documented by recording chronologically as per the steps given below and such details of the auction shall be kept on record.
a) A summary of the auction proceedings.
b) Name of the highest bidder.
c) Amount realized.
d) Delivery of the gold collateral to the respective successful bidder; and
e) The occurrence of the above proceedings shall be recorded and signed by the concerned authorized official of BFL.
vi. Delivery of gold collateral:
The successful bidder must take delivery of gold collateral withinFive (5)working days from the date of auction by depositing the balance amount of the bid. The balance amount of the bid should be paid preferably by way of bank-to-bank transfer to BFL. The purchase receipt should be obtained from each of the successful bidders after full payment and at the time of delivery of the gold collateral. In the event of a successful bidder failing to comply with the payment terms, the Earnest Money Deposit of such bidder shall be forfeited as per the auction terms and conditions and BFL shall be at liberty to sell the pledged gold collateral by way of public sale at its discretion. Any deviation in delay in pay out days to be approved by respective AGM and above.
vii. Loan adjustment:
The auction sale proceeds should be adjusted against the account of the Borrower opened with BFL in relation to the Loan (“Loan Account”).
In the event that the auction proceeds exceed the total outstanding dues including principal, interest, and applicable charges, the surplus amount shall be refunded to the borrower or their legal heirs in accordance with applicable regulatory guidelines.
If the sale proceeds are less than the total dues, BFL shall immediately serve on the Borrower a demand notice for recovery of the balance dues.
The surplus, if any, from the auction of the gold collateral, shall be refunded to the borrower(s)/ legal heir(s) within a maximum period of seven working days from the date of receipt of the full auction proceeds
viii. Communication to the borrower:
After completion of auction sale proceedings, the concerned BFL Branch shall inform/intimate the Borrower(s) about the auction sale by way of a letter giving therein the following details:
a) Amount received from bidder(s) by way of auction sale;
b) Surplus or deficit in the Loan Account after crediting the auction sale proceeds;
c) Further recovery action to be initiated for deficit/ shortfall in the Loan Account which the Borrower(s) is supposed to make good;
d) Circumstances where auction may be deferred
e) Auction may be deferred, at the discretion of BFL, under the following circumstances.
ix. Auction hold:
Auction can be deferred but not necessarily basis below instances.
a. Customer has paid 50% or more of his outstanding.
b. There is a notification sent by government authorities to maintain status quo.
c. In case there is a legal proceeding involving the customer/ Loan.
d. In case of any other instances with approval of DGM and above – Gold loan
Details of accounts scheduled for auction in May 2026 for loan against gold collateral.
Details of accounts scheduled for auction in June 2026 for loan against gold collateral.
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Disclaimer
Bajaj Finance Limited (BFL) has the sole and absolute discretion, without assigning any reason to accept or reject any application as per BFL policy. *