Rama Krishna Sangem
Middle class people prefer gold loans. Not just them, even poor and upper middle class too are lining up to monetize their gold and jewelry. In a recent trend, people are preferring to take gold loans from mostly public and private banks. The tendency to go to private lenders – pawn brokers – is declining. Gold, of 22 carats, is now valued at Rs 1,10,00 per 10 grams. Scheduled banks give up to 75 per cent of it as loan.
Some private lenders give up to 90 per cent as loan. But, interestingly, people are preferring only lower amounts, for the fear of losing it forever, in case of default on repayment. Interest rates range from 10 to 19 per cent per year. Some private lenders charge up to 30 per cent too. RBI has directed banks to close the gold loans after the tenures and take a fresh loans, but not usual renewal after the expiry date.
These are he facts revealed by a recent RBI report on the gold and other personal loans in the country. This report tells us not just the level of gold loans in the country, but also people’s perception towards the yellow metal’s monetary value. People no longer treat raising a gold loan from a nearby bank as a misery. They view this is a matter or pride and self-respect, said a senior manager of Axis Bank, Banjara Hills in Hyderabad, while talking to Excel India.
