How do lenders handle valuation discrepancies in gold between customer and evaluator?

When there is a difference between what a borrower expects their gold to be worth and the value assessed by the lender, it is usually due to standard valuation practices rather than arbitrary judgement. Such differences are quite common in gold loans.

Lenders rely on trained valuers and follow RBI-aligned procedures to ensure consistency. Purity is checked often using non-destructive tools such as X-ray fluorescence (XRF), which can reveal the exact caratage. This result may differ from assumptions based on hallmarking or past purchases. The jewellery is also weighed carefully, with the value calculated only on the net gold content after excluding stones, clasps, solder, or other non-gold parts. In addition, lenders generally use an average of recent gold prices rather than the rate of a single day to avoid sharp market fluctuations. The loan amount is then capped by the RBI-prescribed loan-to-value limit.

If a borrower disagrees with the assessment, the valuation is usually explained or repeated in their presence. Most concerns are resolved at the branch once the process is clearly shown.