Gold Loan Valuation Too Low? How to Dispute It

"I pledged 40 grams of jewellery, but the lender says it has only 34 grams of gold and offered far less than I expected." That is the most common gold loan valuation complaint. The quick fix: ask for the assay certificate, check the three numbers that decide the value (net weight, purity and reference price), and challenge the one that is wrong in writing before you sign or, if you already signed, through the lender's grievance process.

As of October 2026, all banks, co-operative banks and NBFCs must follow RBI's Lending Against Gold and Silver Collateral Directions, 2025, which made the valuation method uniform and gave you clear rights. For the full framework, see our gold loan guide.

Why it happens

Most valuation disputes come from one of five gaps between what you expect and what the rules require:

1. Gross weight vs net weight. The lender values only the gold. Stones, beads, wax or lac filling, springs and other metals are deducted. Heavy temple jewellery or stone-studded sets can lose 10% to 25% of their weight this way.
2. Purity lower than you thought. Jewellery bought as 22 carat (91.6% pure) may test at 20 or 18 carat, especially older, unhallmarked pieces or items with solder joints.
3. Reference price, not today's price. RBI requires the lower of the 30-day average closing price and the previous day's closing price, published by the India Bullion and Jewellers Association or a SEBI-regulated commodity exchange, for the actual purity. When prices are rising, this is lower than today's rate.
4. Making charges are not counted. The jeweller's bill includes making charges and GST. A lender values only the metal.
5. Genuine errors. A scale that is not calibrated, a wrong entry in the certificate, or a purity test done carelessly. These are what a dispute can fix.

How the value is worked out under RBI rules

For bullet repayment loans, the LTV cap applies to the total payable at maturity, principal plus interest, so the cash you receive is lower still. Our guide to the gold loan per gram rate shows how the per-gram figure is derived.

Worked example: where the gap comes from

Sunita takes a necklace and bangles with a gross weight of 40 grams. She expects a value based on 36 grams of 22 carat gold at today's rate of ₹12,200 per gram (illustrative). The lender records 34 grams net at 22 carat and uses its reference price of ₹11,800 per gram, the 30-day average, because it is lower than the previous day's close.

Both loan amounts fall in the ₹2.5 lakh to ₹5 lakh band, so the cap is 80%. The total gap in value is ₹4,39,200 − ₹4,01,200 = ₹38,000, and in loan amount ₹38,000 × 80% = ₹30,400.

Split the gap to see which part is worth disputing:

• Price basis: 36 g × (₹12,200 − ₹11,800) = ₹14,400. This follows RBI's formula and is not a valid complaint.
• Weight: 2 g × ₹11,800 = ₹23,600. This is worth checking. Ask the lender to show the deduction for each item and to reweigh in front of you.

If the 2 grams are genuinely stones and lac, the valuation is correct. If the certificate does not list them, or the scale reading differs on a recheck, she has a real dispute. Before borrowing, use our EMI calculator to see what the smaller loan would cost each month.

How to fix a valuation dispute: step by step

Before you sign

1. Stay at the counter during the test. RBI requires your presence while the gold is assayed at sanction. Watch the weighing and ask what test is being used.
2. Ask for the item-wise break-up. Gross weight, deduction for stones and fittings, net weight and purity for each piece, not a single total.
3. Ask which reference price and date were used. Compare it with the price published on the lender's website for that day.
4. Request a reweigh on a calibrated scale if a figure looks wrong. Small differences of a few milligrams are normal; whole grams are not.
5. Walk away if you are not satisfied. You are not bound until you sign and accept the money. Take the jewellery back and check the seal and count before you leave.
6. Get an independent test. BIS-recognised Assaying and Hallmarking Centres test consumers' jewellery and issue a report; BIS has listed the fee as ₹200 for up to four items. Ask how the test is done, as some methods remove a tiny sample.

After you have signed

7. Check your copy of the assay certificate against your own records: purchase bills, hallmark (HUID) numbers and earlier valuations.
8. Write to the branch manager within days, quoting the loan account number, and attach the independent test report if you have one. Ask for a re-assay in your presence.
9. Ask for a revised sanction or a top-up if the re-assay shows more gold. Any increase must stay within the LTV cap and follows the lender's renewal or top-up process; see gold loan renewal and top-up.
10. Keep everything in writing. Phone calls leave no trail for the Ombudsman.

Where to complain and the timelines

The Ombudsman will expect proof that you complained to the lender first. Strong cases include a certificate that does not list deductions, purity or weight that differs from an independent test, a reference price not matching the lender's published rate, and no assay in your presence. If the lender ignores you, our guide on a bank not resolving your complaint explains the Ombudsman process in detail.

Sample complaint to the lender

Subject: Request for re-assay of pledged gold, loan account [number]

Dear Sir/Madam,

I pledged [number] items of gold jewellery at your [branch] branch on [date], loan account [number]. The assay certificate records a net weight of [34 g] and purity of [22 carat]. My purchase bills and an independent test report from a BIS-recognised centre dated [date] (attached) show a net weight of [36 g].

The certificate does not show item-wise deductions for stones or fittings. Under the RBI (Lending Against Gold and Silver Collateral) Directions, 2025, I request a re-assay in my presence, an item-wise break-up, and the reference price and date used. Please revise the valuation if the error is confirmed.

Regards, [Name], [Mobile number]

What not to do

• Do not sign a blank or incomplete certificate. Every item, weight and deduction should be filled in before you sign.
• Do not leave the counter during the test or hand jewellery to anyone other than an employee at the branch. RBI requires gold to be handled only in branches by the lender's own staff.
• Do not argue for today's jeweller price. The reference price rule is fixed; spend your energy on weight and purity.
• Do not accept the loan and hope to fix it later if the gap is large. A re-assay is easier before the gold is sealed.
• Do not pay agents who promise a "higher valuation". Any valuation outside the RBI method is a breach, and the extra loan can push you into an LTV breach later.

Key takeaways

• Lenders value only the net gold content at the lower of the 30-day average and previous day's reference price for its actual purity.
• You have the right to be present during the assay and to get a certificate with item-wise weights, purity, deductions and photos.
• Split any gap into price, weight and purity; only weight and purity errors are usually worth disputing.
• An independent report from a BIS-recognised centre is strong evidence.
• Escalate from the branch to the grievance officer, then to the RBI Ombudsman at cms.rbi.org.in if there is no fix in 30 days.