Gold Loan Growth Remains Tepid
People nowadays opt for a gold loan as it is accessible quickly at low rates of interest than that of the Pawn Brokers. Gold loans are available by securing gold ornaments or Bank coins to a Bank or Financial Institution. The gold articles or jewellery pledged are protected with the bank and are paid back to the customers after the loan proportion is indemnified. For gold loans of Rs 25 lacs or more ITR and PAN card of the applicant is a must. And if the applicants’ annual income exceeds Rs 5 lakhs as per the Regulatory Guidelines, the Permanent Account Number or PAN card is compulsory. Any Indian citizen who attains the age of majority is competent to get a gold loan and required to furnish all essential documents to get the loan. In June 2021, Rs 4621 was the loftiest rate of Gold Loan Per Gram. According to the reports of the Reserve Bank of India, the aggregate loan disbursed by the commercial banks in India was almost Rs 21,645 crore till the second week of October. On 11th October the amount went up to Rs 97.9 lakh crore. The growth of gold loans also remained tepid till October 11. The credit growth on a year on year basis also dropped from 14.4% to 8.8%. Gold loan companies at times show meagre gain but remain stable due to the increasing price of gold in the Investment market.
A loan Mela announced by the government for 9 days in 250 districts across the whole country, was basically arranged to strengthen the consumption and to restore the demand for loans among the people. This Loan Mela was hit, and Rs 81,781 crore was disbursed by State-run banks within October 1-9 as announced by the Finance Secretary at a media conference in October. Gold rates and loan to value better known as LTV, have gone down by 16% and in the last quarter, there was barely any growth registered. Even there is a decline in portfolio around 4 to 5% but the underline collateral remains steady. The gold loan demand is pretty good and new customer acquisition is also steady. The gold loan business is doing satisfactorily, except 7 to 8% provisions in MFI. In India, nearly every bank delivers gold loans to their customers with interest rates varying from 7.35% to 12.5% and the lowest processing charges.
A Comprehensive Comparison Of Gold Loan Interest Rates In Various Banks Are Given Below:-
- Punjab National Bank:- Punjab National Bank delivers a gold loan @8.75% for 12 months and the processing charges are 0.7% of the loan amount borrowed plus taxes.
- ICICI Bank:- ICICI Gold Loan offers gold loan @9% for 12 months and the processing fees is only 1% of the loan amount. The bank offers no foreclosure charges with a very transparent application process.
- HDFC Bank:- HDFC gives gold loan @ 9.5% for 24 months with 1% of the loan amount as processing charges.
- Manappuram Bank:- Manappuram Finance provides a loan @9.9% for 3 months with Rs 10 processing fees to be paid at the time of settlement of the loan.
Several alternatives are available to the applicants of gold loan to choose from according to their requirements and budget. Gold loans are risky as there are possibilities of the gold will be forfeited if timely the loan is not paid back so prior planning is a must before opting for the same.
Must Read:- Is Gold Loan Secured?
