In the current situation, gold loans have been specifically set aside for use in post-COVID demands; especially for individuals and small businesses. An extended branch network of lenders including NBFCs and a strong digital footprint could be the only way to get this extra market share. Most NBFCs, which have significant portfolios of gold loans, are the main beneficiaries of rising loan demands.
The Indian State Bank, which includes Allahabad Bank, has also seen a 10 percent increase in the ticket size of the Allahabad Bank Gold Loan at Rs 88,000. About 3.30 lakh accounts were obtained with a gold loan, amounting to Rs 3,000 crore, in May.
- Post lockdown and demand for gold on Unlock-1 has now risen sharply in major cities, while it has increased slightly in tier-2 and tier-3 cities.
- The high rescue rate is seen in rural areas as consumers prefer to sell gold jewelry to take advantage of rising prices.
- New customer acquisitions have been slow as growth rates for gold loans are mainly for existing customers and especially for online purchases.
- The average loan period is 12 months and interest varies between 7.5 percent and 11.4 percent per annum.
- The Reserve Bank of India (RBI) has allowed public sector banks (PSBs) to start offering gold loans, so customers can get better interest from these lenders compared to the traditional NBFC which offers gold loans.
As per industry trends and forecasts, the need for a gold loan is expected to remain stable. Two main reasons for this trend continue the belief that gold prices are expected to continue to rise in the next few years and the current dangerous opposition to traditional banking channels is expected to drive more consumers into dealing with gold loans.
Gold lending institutions with multiple national reaches, especially in the 2nd and 3rd tier cities, and a strong digital track record are expected to be the main beneficiaries of the gold loan evasion shortly.
In today’s time where so many lenders have come up with their exciting deals with the offering of Gold Loans, it has become difficult for the borrowers to decide and select one single lender that suits their needs and situations the best. We at Dialabank with a team of experts in the financial advisory are here to guide you through the various financial products available in the market.
Call us today to get your queries resolved- 9878981144