Surveying The Indian Gold Loan

Cognizant 20-20 Insights Surveying the Indian Gold Loan commercialise executive director Summary Gold has long been a valued commodity, particularly in India where it is considered auspicious, and has been in use for centuries in the form of jewelry, coins and other assets. though fortunate is a passing pellucid asset, it wasnt until belatedly that consumers leveraged it effectively to meet their fluidity pauperizations. Lenders provide contributewords by securing fortunate assets as collateral. Compared with the rest of the world, in India the amber loan mart is big business. Until a hug drug back, most of the lending was in the un make sector by dint of pawnbrokers and money lenders. However, this scenario changed with the entrance of create sector players such as banks and non-banking finance companies (NBFCs) which now overshadow more than 25% of the marketplaceplace. The organized gold loan market has grown at 40% CAGR from 2002 to 2010. NBFCs develop been a major driving force tin this growth given their extensive network, faster turnaround time, higher(prenominal) loan-to-value ratios and the ability to serve non-bankable customers. Of late, banks deal improved their gold loan harvest-feast features and services. Coupled with relatively lower hobby rates and charges, banks go to gain market share at the expense of NBFCs in the near future.

With fast growth, regulatory scrutiny has increased on gold loan lending practices. NBFCs are under greater focus as a result of their higher interest rates and charges, and non-adherence to realize your customer (KYC) reg ulations. This may further tinge the domina! nce of NBFCs in the gold loan market. At effective 1.2% of the total gold stock in the country at present, gold loans have a huge growth potential. However, firms need to develop distribution, product and risk mitigation strategies to get a share of the pie in a profitable and sustainable fashion. backcloth: Gold and the Indian Society As previously noted, gold has traditionally been among the most liquid assets and is an...If you want to get a full essay, order it on our website: BestEssayCheap.com

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