How is the purity of gold verified before sanctioning the loan?

Before a gold loan is approved, lenders check the purity step by step. The piece is weighed to note gross weight. Stones, clasps, and other non-gold parts are not considered part of the gold content while assaying the assets.

Next comes purity. Most branches prefer a BIS-hallmarked ornament; if it isn’t hallmarked, they send it to an authorised assayer for detailed testing. The check confirms whether the jewellery is truly 22 karat, 20 karat, or lower. Once purity is recorded, the valuer applies the day’s market rate for that carat level to estimate how much can be sanctioned

RBI’s April 2025 draft directions ask lenders to follow a uniform process for assaying and valuation across branches. Clean, hallmarked pieces usually move faster, and with fewer questions.