Interestingly in the current scenario, gold loan providers are set to profit even in the prevailing pandemic situation, as the customers would look to acquire funds at the earliest by leveraging their gold holdings.
An increase in gold prices would give the gold loans an edge over other loans. Other drivers for the gold loan market are the challenges that customers might face while getting any other type of unsecured loans. Due to the lack of formal documentation, and the adversely affected finances owing to the economic slowdown, it has become challenging for individuals and entities to stay afloat.
CSB bank’s gold loan portfolio has increased during the pandemic
Where the retail credit demand was not expected to revive any time soon, CSB bank has witnessed a rise in demand for gold loans.
Formerly known as the Catholic Syrian Bank, the Kerala based CSB bank has joined in the charade of cheerful news coming from all quarters of India during the July-September Q2 which saw an incremental decrease of the lockdown. During its regulatory filing this Wednesday, the bank noted that it’s gold loan portfolio has grown 47% year-on-year to almost reach the significant 5,000 crore mark, during the second quarter of the current fiscal year.
Among other declarations, the bank also highlighted that its gross advances have increased by 11.92% to reach 12,761.91 core. Gold Loans formed a significant chunk of these advances (31%).
The second quarter of FY21 also, total deposits increased year-on-year by 12.63% to touch rupees 17,468.73 crores, in which term deposits accounted for rupees 12,334 crores. The net profits of the lending organisation stood at rupees 53.56 crores for Q1, which is a significant 174% increase, year-on-year.
Even though the downturn of the economy has left many in a disastrous state, many financial organisations have come up with offers to assist their customers and to bring the business back to the pre-COVID levels.