Wednesday, 29th September 2004 (5125 views)

Indian banks are reaping the benefits of the demand for gold as they continue to make profits from loans against gold jewellery.

According to Business Standard, the loans are particularly popular since women in the southern states see the precious metal as a top investment and therefore more of them want gold jewellery products.

Sanjeev Agarwal, managing director, World Gold Council, south-east Asia explained: "The gold jewellery loan comes at an interest rate of nine to 10 per cent per annum. The average size of a loan is about Rs 50,000 and the recovery rate is also good as it is aimed at working women."

The products are also popular since the south has key links with well-known jewellers, making the situation more convenient for consumers in terms of banks and accessibility.

Among the banks in the region offering the loans are the Indian Overseas Bank, Canara Bank, South Indian Bank, Karur Vysya Bank and Lakshmi Vilas Bank.

The minimum loan to be taken out on gold jewellery is Rs 25,000 whilst the maximum is Rs 2,00,000.

 

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