State to frame SOP on gold valuers’ fees after MLAs flag low pay, risk burden

Mumbai: The Maharashtra government on Monday said it will frame a standard operating procedure (SOP) on the honorarium paid to gold valuers by banks, following concerns raised in the Legislative Council over low fees and rising risks faced by jewellers engaged in gold loan assessments.Cooperation minister Pankaj Bhoyar was responding to a calling attention motion moved by MLC Chitra Wagh, who highlighted that valuers — largely jewellers — are underpaid despite bearing significant financial and legal responsibility in gold loan transactions.Bhoyar said the government would consult legislators before finalising the SOP on honorarium. However, he indicated that direct intervention in fee structures may be limited, noting that such charges are typically decided between banks and valuers.Raising Calling Attention Notice No. 609 under Rule 101, Wagh pointed out that gold valuers play a critical role in ensuring transparency and accountability in gold loan disbursal, as they are solely responsible for assessing the purity and authenticity of pledged ornaments.She said that with gold prices rising and compliance requirements becoming stricter — including fraud prevention, ownership verification and KYC norms — the burden on valuers has increased substantially.Despite this, the remuneration remains low. For instance, valuers earn around ₹350 for assessing gold worth ₹10 lakh, she said, adding that private banks have reduced fees by nearly 60% in recent years without consultation.Wagh argued that given the heightened risks, including liability and insurance in case of incorrect valuation, fees should be increased by at least 30%. She also called for removal of "unlimited indemnity" clauses and sought clearly defined, reasonable liability limits in agreements.No clear guidelines yetIn his reply, Bhoyar said the state government has not issued specific guidelines on gold loan transactions, which are governed primarily by norms set by the Reserve Bank of India.He noted that gold loans are extended by a range of institutions including nationalised and private banks, cooperative banks, rural banks, cooperative credit societies and non-banking finance companies (NBFCs).As per RBI guidelines, banks can lend up to 65% of the gold value for loans up to ₹2.5 lakh and up to 75% for loans up to ₹5 lakh, with a typical repayment period of one year.The minister added that while some large banks use machines to test gold purity, many continue to depend on valuers. However, there are no prescribed norms by either the RBI or the state government on the fees payable for such services.Fee burden may hit borrowersBhoyar cautioned that any increase in valuation fees could ultimately be passed on to borrowers, making gold loans costlier for customers. "Since the fee charged by valuers is often recovered from borrowers, recommending an increase may not be appropriate," he said.He reiterated that matters such as valuation fees are considered contractual between banks and valuers, and hence outside the scope of direct government regulation.Demand for broader reformsWagh also pressed for standardised loan agreements in Marathi, balanced contractual terms between banks and valuers, and stricter implementation of documentation and KYC norms to curb fraud.She claimed that proper verification and documentation could reduce instances of fake jewellery being pledged by up to 10%.While the government stopped short of announcing immediate regulatory changes, the proposed SOP — to be drafted after consultations — signals a possible framework to address concerns over compensation, accountability and risk-sharing in the gold loan ecosystem.For thousands of jewellers working as valuers across Maharashtra, the move is likely to be closely watched as they seek fair pay in a business that underpins a key segment of retail lending.