There is a very low degree of asset price risk with the hypothecated gold.. … That means you are still profitable on your hypothecated asset. Effectively, it means that the gold loan company charges you a hefty interest on a loan that is fully secured and the risk of asset price default is very negligible.
Beside above, how can I get gold loan license in India?
First, you must be financially sound, although you can get loan from bankers and other sources but you must need to invest minimum 50% for the required finance to start the Gold loan business. Then you should need to get secure licenses and requirements for opening a company from your state government office.
Correspondingly, how do gold loan companies work?
How does gold loan works? … The lender evaluates the gold articles and verifies the submitted documents. As per the evaluations, the lender sanctions the loan amount. As per the loan agreement, you pay off the principal amount along with the interest amount and get the pledged gold articles back.
Is gold loan business profitable?
Q: So, what’s so special about the Gold Loan (GL) players? A: Lots actually. For instance, the two GL specialist players (Muthoot and Manappuram) are among the most profitable listed lenders in India. They have averaged an ROE of 20-30% over the last decade.
Summary. Muthoot Finance is the largest NBFC in the gold loan segment. It taps on the financial needs of its customers. Along with providing unique and exclusive services to its customers, Muthoot Finance also knows the perfect business strategy to make itself a competitive NBFC in India.
Gold Rate Today in India (in Rs/1 gm)
|Gold Rate||Gold Rate In Bangalore||Gold Rate In Chennai|
The World Gold Council expects the gold loans market to grow at an annual rate of 15.7% and reach 4.617 trillion rupees in the fiscal year ending March 2022, from 3.448 trillion rupees in the year ended March 2020.
“The total gold loan book of the bank was Rs 21,293 crore,” said an SBI official. But the huge jump in the gold loans business is also an indicator of Covid-19-induced distress following a national lockdown, job losses, salary cuts and higher medical expenses.
Best Gold Loan Interest Rates Comparison
|HDFC Bank||9.50% to 17.55%|
|Muthoot Finance||12% to 27%|
|ICICI Bank||10% to 19.76%|
|Punjab National Bank||8.75% to 9.0%|
|Yes Bank||8.40% to 14.40%|
Gold Loan Interest Rates Comparison
|Name of the Bank||Interest Rate||Loan Amount|
|HDFC Gold Loan||11% p.a. to 16% p.a.||Rs.10,000 onwards|
|Canara Bank Gold Loan||7.35% p.a.||Rs.5,000 to Rs.35 lakh|
|Muthoot Gold Loan||12% p.a. to 26% p.a.||Rs.1,500 onwards|
|SBI Gold Loan||7.00% p.a. onwards||Rs.20,000 to Rs.50 lakh|
List of Top 10 Banks / NBFCs offering Gold Loan in India – 2021
|Gold Loan Providers||Interest Rate||Tenure|
|Muthoot Finance||12% p.a. onwards||7 days to 36 months|
|IIFL||9.24% p.a. onwards||3 months to 11 months|
|HDFC Bank||9.90% onwards||3 months to 24 months|
|ICICI Bank||11% p.a. onwards||3 months to 12 months|
A company which does not have financial assets which is more than 50% of its total assets and does not derive at least 50% of its gross income from such assets is not an NBFC.
India Gold Loan Market, By End Users:
Traders. Micro-Enterprises. Self-Employed. Others.
As per the current rates, Muthoot offers a lower interest rate of 6.90% on Gold Loan when compared to Manappuram which offers a Gold Loan at 7.00%.