A

DISSERTATION REPORT

ON

STUDY OF COMPARISON OF GOLD LOAN SCHEME

OF DIFFERENT BANKS

In Partial fulfillment of Requirements

For the Award of Requirement of

Masters of Business Administration

SUBMITTED TO

PUNE UNIVERSITY

By

SUMIT KUMAR SINGH

(MBA, FINANCE)

Under the Guidance of

Prof. AJITA MORE

SKN SINHGAD SCHOOL OF BUSINESS MANAGEMENT

AMBEGAON, PUNE

ACADEMIC YEAR 2016-18

 EXECUTIVE SUMMARY

Gold is considered to be one of biggest asset during crises or unwanted situation and comes
under secured personal loan. By using the power of gold you can easily avail a loan in no time
and in a convenient way. Loan against gold can be used for expanding business or to getting
fulfilled your different financial requirements like unforeseen medical emergencies, higher
education, marriage or planning a family vacation etc. by mortgaging your Gold ornaments,
Coins or bars etc Our study aimed at comparative analysis of Gold loan schemes offered by
different banks in India. For this purpose we have taken four commercial banks namely
Manapurram Finance, Muthoot Finance, HDFC Bank, Axis Bank. There are sample
opportunities today for young salaried investors to plan to put themselves on the path to
acquiring property that would meet the needs and aspirations of their growing family, even as
it leads to wealth creation. The process of sanctioning of Gold loans of the banks. The charges
of the rates of different banks offered by the banks. The required document process of the
different banks to availability of the loans have described in this project.

All the constructs are exhibited below with the dimensions and shows the overview of pattern
of analysis which is adopted, data colleceted method, research instuements. And also
summarises the main findings and conclusion of the study. Moreover, in the light of these
findings, appropriate suggestions have been worked out. The reference from which the data
were collected. And also shows the various names of websites from which the data were
collected.
 DECLARATION

I, the undersigned, hereby declare that the project report entitled “A Study of Comparison
of Gold loan Scheme of Different Banks ”with is written and submitted by me to the
Savitribai Phule Pune University, in partial fulfillment of the requirement for the award of
degree of Master of Business Administration under the guidance of PROF. AJITA MORE.
This is my original work and conclusions drawn there in are based on the data collected by
myself.

Place: Sumit Kumar Singh

Date:
 Acknowledgement

This project report could not have been completed without the guidance of Hon. Director

Dr. RAJASHREE SHINDE (SKNSSBM) and Dissertation Guide Prof. Ajita More

I express my sincere thanks and gratitude to the above stated persons who have helped me

directly and also who have indirectly helped me.

Once again I express my gratitude to our college SKN SINHGAD SCHOOL OF

BUSINESS MANAGEMENT for kind Co-operation.

Place: Sumit Kumar Singh

Date:
 SINHGAD TECHNICAL EDUCATION SOCIETY’S S.K.N. SINHGAD SCHOOL OF
BUSINESS MANAGEMENT, AMBEGAON (BK.), PUNE - 411041

Date:
CERTIFICATE

This is to certify that the Dissertation entitled “ A Study of Comparison of Gold loan

Scheme of different banks “ is the original research work completed by Prof. Ajita More

under my supervision and guidance . This is submitted herewith as the partial fulfillment for

the award of the degree of MASTER OF BUSINESS ADMINISTRATION (MBA) of

Savitribai Phule Pune University.

Approved by:

Dr. Rajashree Shinde, Name & Signature of Guide

Director
 CONTENTS

CHAPTER PARTICULARS PAGE NO.

1 EXECUTIVE SUMMARY

2 INTRODUCTION

3 LITERATURE OF REVIEW

4 RESEARCH METHODOLOGY

5 DATA ANALYSIS AND INTERPRETATION

6 FINDINGS, SUGGESTIONS AND

CONCLUSION

7 BIBLIOGRAPHY
CHAPTER 1: INTRODUCTION
 Introduction of the Topic:
Gold is not a metal for Indians it is Goddess Lakshmi, it is very deeply involved in our
emotion so Glitter of Gold is always on higher side. Gold is part of Hindu rituals from
ancient time. It is taken as the safest way of investment from the time when the banks were
not in the existence. In India maximum population rely on agriculture and the crop
production is done either once or twice and this is the earning for whole year so they secure
excess money by investing in gold and silver (generally in the form of jewelry to facilitate
rituals). When they need money they pledge it to money lender for fulfilling the short term
need. According to World Gold Council reports, two-thirds of the gold demand in India
comes from the rural agricultural sector. So the concept of Gold loan in India is from old
time. The concept of gold loan was previously available in banks but not on their priority
but the success of some non banking financial companies has attracted other player of this
market to tape the potential.
.

OBJECTIVE OF THE STUDY:

1. To evaluate and compare the Gold loan Schemes of Manapurram Finance, Muthoot
Finance, HDFC Bank and Axis Bank
2. To know about the process of Gold loan sanction process of different banks.
3. To know about the documents required for sanctioning of Gold loan.
4. To know about the rate of interest charges of different banks.

SCOPE OF THE STUDY

1. The main purpose of doing this project was to know about Gold loan .This helps to
know in detail about Gold loan providing by different banks.

2. It also helps in understanding different schemes of Gold loan of banks because my

study is based on the interest rates offered by banks. It helps us to understand the
banking facility .

3. The project also ascertain the documentation required for sanctioning of Gold loans.
Ultimately this would help in understanding the benefits of Gold loan.

4. The project is based on the banks Muthoot finance, Mnapurram finance,HDFC and
Axis Bank.
LITERATURE REVIEW

Venkateswaran (2012) analyzed that organized gold loan market grew at CAGR of 40 per cent
during FY 2002-10. The study pointed out that gold loan market was under-penetrated which
accounted just 1.2 per cent of the value of total Gold stock in India. The study concluded that
negligible penetration, aggressive network expansion and increasing adoption of gold loans
attracted more financial institutions to enter into business to give competition to existing
NBFCs. Mary (2013) found out that the demand for gold as an investment avenue was gaining
momentum among consumers of Cochin and Delhi. The research resulted that gold was price
sensitive at low prices but insensitive to price increase. The study concluded that the gold
customers in Cochin and Delhi were price insensitive in nature. Roy (2013) analyzed with the
help of CAMEL model that the gold loan NBFCs (Manappuram Finance, Muthoot Finance
and Muthoot Fincorp) used heavier debt in their capital structure, aggressive lending policies
and their lower liquidity put them on the edge of high risk. Gupta (2014) compared the
Economic value added (EVA) with the traditional performance measures (CAMEL indicators)
as a predictor of financial health of all public sector banks and 20 top private sector banks
during 2003 to 2008. The results revealed that Earning Per Share (EPS) and Return on Net
Worth (RONW) were better predictor of financial health of banks followed by EVA over the
other indicators. Kumar and Sharma (2014) analyzed the performance of the top 8 market
capitalized banks by using CAMEL approach during the period 2006-10. The overall
performance showed that SBI was top performer followed by PNB and HDFC bank. Malhotra
and Aspal (2014) analyzed the financial performance of the new private sector banks in India
by using the CAMELS model during 2008-2012. The study indicated no significant difference
in CAMELS ratios among the new private sector banks. The study concluded that Kotak
Mahindra bank have excellent performance followed by Axis bank and MANAPURRAM
FINANCE bank secured the last rank in terms of performance. Thilakam and Saravanan
(2014) examined the financial soundness of the 30 selected NBFCs in Tamil Nadu by using
the CAMEL model during the period
RESEARCH METHODOLOGY
RESEARCH DESIGN:

A research design is an arrangement of conditions for collection and analysis of data in a manner that
aims to combine relevance to the research purpose with economy ion procedure.

For carrying out my research work I would follow Exploratory research design.

Sample Size
Sample size would be 4 Banks & NBFCs.

The research involves the following steps:

➢
Primary Data:
Primary data for a project is the first hand information regarding the project being
studied. In this regard the primary data for this project would be getting the necessary
information form the bank by an interview , telephonic conversation or direct mail.
➢
Secondary Data:
Data that has been collected earlier for some different purpose but is currently useful in
the current study is termed as secondary data. The main source of secondary data
includes,

• Organizational files
• Official records, Newspapers, Magazines.
• Internet
DATA ANALYSIS AND INTEPRETATION
The Gold loans provided by the banks are more or less same at the basic level. The banks
generally try to go ahead of other banks in terms of attracting number of customers to their
countries. For this they are trying to offer some unique services as per the unique requirements
of the unique important customers.

COMPARITIVE STATEMENT OF GOLD LOAN

Basis Manapurram Muthoot finance HDFC AXIS

finance
Eligilibility Min age – 18 years Min age– 21 years Min age–21 Min age-21
Max age – 70 years Max age- 65 years years Maxage-65 years Max
years age-70 years
Max. Loan Upto 1.5 crores Upto 1 crores Upto 1 crores Upto 20 lakhs
Amount
Rate of Interest 9.90% - 26% Fixed 12% - 26.75% 9.60% - 15.50% 14.50%-
Floating Floating 17.00%
Floating
Lowest EMI Rs. 8787/ - per lakh Rs. 8340/- per lakh Rs. 8360/- per Rs. 3250/per
lakh lakh
Repayment Maximum 1 year Maximum 15 Maximum 48 Maximum 36
Period months months months
Margin/LTV Upto 90% Upto 90% Upto 90% Upto 85%
Ratio
Processing 0.35% of loan 0.25%-1% of loan 0.50% of loan 1% of loan
Charges amount, Min. Rs. amount, Max. Rs. amount, Min. amount Min.
2000 and Max. 10000 ( Plus S.T. ) Rs.2500 and Rs. 1000 and
Rs.10000. ( Plus Max. Rs. 10000. Max. Rs.
S.T.) (plus S.T.) 10000(plus
S.T.)

A comparison of interest rates charged by lenders across loan categories. The comparison of
interest rates shows that gold loans fetch banks higher rates as compared to home loans and
car loans. Hence, this category is being targeted aggressively by banks. However, NBFCs
have a much greater focus on gold loans and continue to provide attractive loan features which
enable them to charge higher rates, generate higher profits and grow rapidly in a singular
direction.

Since lenders take possession of the gold assets in a loan transaction, in case of a theft they
may not have sufficient funds to compensate all the borrowers for their loss in its entirety.
This is more important for loans placed in the unorganized sector; banks/NBFCs usually have
better security and insurance coverage. Furthermore, financial packages cannot compensate
for the personal attachment a borrower has with the gold assets.
 MANAPURRAM FINANCE

APPLICATION PROCESS OF YOUR GOLD LOAN

Gold loan is the most suitable option when you have instant need of funds. Loan is sanctioned
on the basis of the gold you pledge. Nowadays people prefer to take gold loan over personal
and business loans because it requires minimal documentation and it is available with
comparatively lower interest rates. With the rise in gold rates, the demands of gold loans have
risen significantly

You can apply for a gold loan with Manappuram directly through branch walk-in or by filling
an online application form. However, to get the best gold loan rate offers and comparison of
all banks, you can apply online through MyLoanCare. MyLoanCare will give you a detailed
comparison of gold loan schemes of all banks, calculate your gold loan eligibility and connect
you to the best bank for gold loan. Customer representatives of bank will get in touch with
you instantly to fix up an appointment for branch visit. You will also be assisted by a
dedicated MyLoanCare loan executive who will ensure that the process of getting loan is
smooth, convenient and quick. You can get gold loan in a single branch visit during which
Manappuram will do an appraisal of your jewellery in terms of its purity and weight. In case,
the jewelry meets the bank standards, the bank will sanction your loan and give you an instant
loan against the security of your gold jewelry..

If it is refinancing you are interested in, it is possible within 6 months from the date of
purchase of property.

Documents required for Gold Loan Sanction

 Manapurram Finance, India’s leading Gold Loans Provider, offers attractive interest rates
and unbeatable benefits to ensure that you get the best deal. Keeping your convenience in
consideration, we ask you for minimal mandatory documents for the sanctioning of Gold
loan, to keep the process totally hassle-free.

The documentation process of Manappuram is smooth. You need to submit one proof of
identity and one proof of address to get a gold loan. The list of identity and address proofs is
as follows:
• Identity proof: PAN Card, Driving License, Passport, Voter’s ID Card, Aadhar Card
• Address proof: Voter’s ID Card, Aadhar Card, Rent Agreement, Utility Bills, Bank
Statement

GOLD LOAN

Anyone who owns gold can avail Manappuram gold loan. In order to get the loan sanctioned,
an applicant has to submit their gold which should be within the range of 18 to 24 carats. The
loan amount that is to be sanctioned will be based on the valuation of gold; lenders would
check the purity of gold before sanctioning a gold loan. If the pledged gold ornaments have
any stones fixed/fitted in it, then weight of such stones would be neglected for precise
valuation.
However, minors (below 18) are not eligible to avail gold loan.

LOAN AMOUNT

✓
A number of factors are taken into account when assessing repayment capacity.
✓
Customer income, age, number of dependents, qualification, asset &liabilities, stability
and continuity of customer employment. Business is one of them. However there are
ways by which you can enhance your eligibility.
✓
If the customer spouse is earning put he/she as a co-applicant. the additional income
shall be included to enhance the loan amount. Incidentally, if there are any co owners
they must necessarily be co-applicant customer fiancée’s income can also be
considered sanctioning the loan on your combined
✓
Income .the disbursement of the loan, however will be done only after the submit
proof of Marriage. Providing additional security like bonds, fixed deposits & LIC
policies may also help to enhance Eligibility.
✓
While there is no need for guarantor, it could be that having one might enhance your
credibility with us. If so, our loan officer would provide customer with positive
necessary details.
 ✓
The final act to be sanctioned will depend on your repayment capacity. However, what
customers ultimately are entitled to will have to conform within the limits fixed for
each loan.
✓
Also when the company looks at the total cost, registration charges, stamp duty,
transfer charges are also included.

GOLDLOAN

We at Manapurram Finance understand the value of owing your house. Our affordable Gold
loans can make all the difference to their dreams.

LISTINGS BELOW ARE THE STEP INVOLVED IN AVAILING OF A GOLDLOAN

✓
A person applies for a Gold loan
✓
The executive meets the applicant & briefs him the entire loan process, requirements
& the various options available.
✓
The applicant chooses a Lender & handover the income
✓
Document to the executive are the income documents are headed over to the Lendor
for eligibility & approval.
✓
The lender verifies the documents & checks the repaying capacity, saving habits,
tenure of services etc. of the applicant & approves the loan amount.
✓
After approval an offer letter is given to the applicant by the lender, along with list of
original title documents that have to hand over to the lender.
✓
The applicant gives the original jwellery title document to the Lender
✓
The lender scrutinizes the legal & the technical aspects of the original title document.
✓
If the lender is satisfy as to the legal & technical aspect of the document then the
applicant is called to sign the loan agreement
✓
The applicant gets the loan amount.
✓
The applicant can start paying the EMIs.

DISBURSEMENT

Customer loan will be disbursed after you identify & select the Gold against which the
customer are taking loanafter showing requisite legal documents.

While the customer may be under impression that the list of documents asked for it is rather
extensive. Each and every single document asked for will be verified & check to ensure their
safety. This may take some time but the banks want to ensure a clear title and will complete
all the legal & technical verification to ensure that they have full right to their Gold.
AMOUNT

This largely depend on a no. of facts like ones age ,profession, salary, the repayment abilty
and the value of ornament is among other such factors. it varies between 1500 to 1 crore
depending on the lender- as the rule of the thumb, depending on lender. For smaller amount,
this may not be much. But for figure remaining into lakh this could make loads of difference..
If one takes this into amount the additional thousands will definitely put a strain on ones
finances
.

TENURE

Generally the maximum tenure of Gold loans is 1 years, with a few lenders offering tenure of
months or more. Manapurram Finance offers 1 year loan. The longer the tenure, the more one
pay in total interest but ones monthly payment will be less. So depending ones earning
potential & bank balance one can choose an appropriate tenure. An important requirement of
most of the banks/ NBFCs is that one pays up the entire loan before end of tenure. One can
always prepay ones entire loan amount before it is due. There is a trend to do away with the
pre-payment penalty being imposed by some lenders. So its best one checks on this as well.

INTEREST RATE

Without doubt the most important parameter to factor into ones calculations. The interest rates
may vary from institution to institution. Repayment is in the form of EMI’s (equated monthly
installment). The longer the tenure, the more one pays in interest, but ones monthly payment
will be less. The interest rate of Manapurram finance is Lowest Gold Loan Interest is
9.90%.The factors that are used by Manappuram to calculate interest on gold loan are loan
amount, loan tenure and loan required as a percent of value of gold jewelry. Manappuram’s
existing account holders get gold loan at best rates compared to other customers.

REFINANCE

This is concept that is yet to catch on in the Gold loan market but is bound to be a major
service in the months to come. Under this facility, one can take a new loan from another
bank/NBFC to pay back another loan before its natural tenure. It gives one the opportunity of
prepaying ones high cost debt and get a lower cost one. In today’s falling interest rate scenario
one should use this vehicle to lower ones debt payment as much as possible. The lender
facilitates the shift by paying the outstanding and transferring the asset to other portfolio.
MISCELLANEOUS CHARGES

The interest rates and EMI’s are not only the cost factor. Never underestimate how much the
processing fee and administration fees amount to. A 0.5% administration fees and 0.5%
processing fee on say, a Rs.500000 loan would be Rs.5000. other timesit could be just one fee
(either administration or processing but could yet work out to be much more if it is
considerably higher at, say, 2.5% or 3%. The various other fees, which one is required to pay
along with the margin amount are:

INTEREST TAX:

This is tax payable on the interest paid on a Gold loan and not the principal. This is sometimes
included in the interest rate of the loan, or may be charged separately as interest tax.

PROCESSING CHARGE

It is the fee payable to the lender on applying for a loan. It is either a fixed amount not linked
to the loan or may be a percent of the loan amunt. The loan amount received by you can be
less than processing fee.

PREPAYMENT PENALTIES

When the loan is paid back before the end of the agreed duration a penality is charged by
some banks or companies, which is usually between 1% and 2% of the amount being prepaid.
Manapurram finance does not charge any prepayment penalties.

BENEFITS
✓
Some of our key benefits are:
✓
Guidance through out the process
✓
Gold loan amounts suited to your needs
✓
Gold Loan tenure upto 1 years
✓
Simplified documentation
✓
Doorstep delivery of Gold loan papers
✓
Sanction approval without having selected a property.
✓
Insurance options for your Gold loan at attractive pre
 MUTHOOT FINANCE

Gold Loans are loans availed by pledging your gold ornaments with a bank. Muthoot gold
loan can be taken for meeting urgent personal expenses like children education, marriage and
other financial emergencies in the family as well as for business purposes. The gold
mortgaged acts as a security to the loan. Taking a loan from Muthoot has the following
benefits:
• Muthoot group offers rebate on its interest payments, if EMI is paid regularly.
• You can get jewel loan of small amount starting from Rs. 1,500 with no maximum loan
amount limit.
• Muthoot doesn’t charge any foreclosure fees from its gold loan customers.

The gold loan offered by Muthoot Finance has the below-mentioned features:

• In the Muthoot Finance Gold Loan, a loan applicant can pledge any type of gold jewellery
or ornaments. This includes various jewellery items such as necklaces, bangles bracelets,
rings, kardahs, etc.
• In the Muthoot Gold Loan, a loan applicant cannot pledge against gold bars, gold funds
(gold Exchange Traded Funds), gold coins, and specially minted gold coins of banks that
weight an excess of 50 grams.
• The minimum age of the loan applicant for the gold loan has to be 18 years.
• The purpose of the Muthoot Gold Loan is simple; it is to provide instant cash to overcome
the short-term financial requirements of a person. These requirements may be such as
money needed to fund a wedding or thread ceremony, money needed to fund medical
expenses, money needed to fund school or college fees, money needed to pay for
consumer durables or electrical or household items, etc.
• Muthoot Finance processes the application made for availing the loan and disburses the
loan in the fastest possible time-frame. For sanctioning of the loan, the documents of the
applicant are of utmost importance and the requirements in terms of documents are
simple. Documents such as the applicants’ Passport or Pan Card or Voter’s ID card, or
Driving License are the kind of documents which are required. These are easily available
with most of the applicants and thus the documentation process becomes simple. Muthoot
Finance has in-house gold valuation experts at their branches, so the processing time of
the loan can be as short as one hour.
• Gold Loan from Muthoot Finance levies a reasonably priced processing fee and ensures
that its customers are not subjected to any hidden charges as they inform their customers
about all fees and charges from the beginning.
• The minimum amount for which one can take a Gold loan is Rs.1500 and thereafter for
higher amounts. The loan limit is stretched to Rs.1 crore for the Muthoot Gold loan.
• The loan has a feature of easy liquidity of the gold pledged to take the loan. By liquidity it
means that the applicant can obtain his gold assets back anytime by paying off the loan in
 full. This is called prepayment and there is no prepayment penalty charged on the loan.
After completing the outstanding requirement of the loan, the gold can be liquidated.
• Walk-in customers who choose to visit the bank’s branch to avail of the loan armed with
the proper and required documents can avail a loan within an hour. Since the required
documents for taking the loan are easily available and simple in nature, they can be
submitted along with the application form and the loan can be availed within the shortest
duration of 3 minutes only.
• The bank provides utmost security of the gold assets which are pledged with it. The
pledged gold is kept under a three-layered security which makes the gold completely
secure and risk-free
• The interest rate that Muthoot Finance charges is somewhat similar with that charged by
other banks and financial institutions. The rates of interestthat are charged are completely
competitive so that customers may prefer Muthoot Finance rather than other banks or
banking institutions.
• Borrowers of the gold loan from Muthoot Finance have the option of pre-payment. There
are no penalty charges if the pre-payment option is availed by the borrower.
• Muthoot Finance boasts of in-house gold evaluation at its branches. Thus, the processing
time for issuing the loan is significantly expedited.
• The response time for customer service is shorter and quicker as compared to other banks
and banking institutions.
• The tenure can be as low as one day to 15 months for normal schemes and 36 months for
EMI-based schemes. It varies from scheme to scheme.
• There are no fixed margins in the Muthoot Gold Loan scheme.
• There are two options open for repayment to gold loan applicants. One is Bullet
Repayment, in this option, simple interest is paid at monthly or quarterly intervals and the
principal is repaid on the maturity date. The other option is repayment by EMIs or
Equated Monthly Installments. In this option, equal instalments comprising of the interest
on a declining basis and a portion of the principal amount is paid every month by the
borrower.
• The processing fees are to a maximum limit of 1% of total loan amount sanctioned.

ELIGIBILITY

Age of the applicant must be less than 60 years.

Existing Gold loan borrower can also apply provided their loan account is regular and no IR
irregularity persist.

DOCUMENTS NEEDED

To avail of a Muthoot Finance Gold Loan, the loan applicant has to submit the following
documents so that his or her loan application is accepted and processed.

• A Passport which should be valid – the passport of the applicant would contain all the
required information of the customer like the name, address, age, etc. and as such is an
important document. A valid passport is one which is not expired.
• Driving License which is valid – apart from the passport, the driving license also
contains the important details of the customer and is accepted as a valid document for the
loan. The license should however, be valid and not expired.
• Election Card –also called a voter’s ID card which is issued by the Election Commission
of India can also be accepted as a valid identity proof of the applicant
• Aadhar Card – the card is issued by the UIDAI and it contains the required personal
details of the customer including his biometrics. The card can be taken as a vlaid identity
proof for the loan
• PAN Card –as per the relevant KYC norms which have been mandated by the RBI, the
PAN number of the individual would be required when availing of the loan. This number
is verified from the individual’s PAN card.

EXTENT OF LOAN

This largely depend on a no. of facts like ones age ,profession, salary, the repayment abilty
and the value of ornament is among other such factors. it varies between 1500 to 1 crore
depending on the lender- as the rule of the thumb, depending on lender. For smaller amount,
this may not be much. But for figure remaining into lakh this could make loads of difference..
If one takes this into amount the additional thousands will definitely put a strain on ones
finances

SPEED OF SANCTION OF LOAN

The loan will be sanctioned within an hour.

TENURE:

• The tenure can be as low as one day to 15 months for normal schemes and 36 months for
EMI-based schemes. It varies from scheme to scheme.

REPAYMENT

• There are two options open for repayment to gold loan applicants. One is Bullet
Repayment, in this option, simple interest is paid at monthly or quarterly intervals and the
principal is repaid on the maturity date. The other option is repayment by EMIs or
Equated Monthly Installments. In this option, equal instalments comprising of the interest
on a declining basis and a portion of the principal amount is paid every month by the
borrower.

RATE OF INTEREST

There are different rates based on different schemes that are offered by Muthoot Finance.
Muthoot Finance offers its gold loans on a fixed rate basis. Fixed rate basis means that the rate
of interest remains fixed over the entire loan tenure.

Loan Tenure Rate of Interest

Loan Tenure of up to 1 month 12.0% onwards

 Loan Tenure of over 1 month to 3 months 15.0% onwards

Loan Tenure of over 3 months to 12 months 20% onwards

Loan Tenure of more than 12 months 21.0% onwards

The interest rate can be fixed or floating

CHARGES

Fees Amount to be paid

Loan Processing Charges Up to 1% of total loan amount

Foreclosure Charges Nil

Corresponding to the applicable State

Stamp Duty & other Statutory Charges Laws

Pre-payment or Part-payment charges Nil

 HDFC BANK

HDFC Bank offers gold loan under its Sampoorna Bharosa Gold Loan which is available
instantly from any of the HDFC’s Bank branch. The loan promises cash against gold which is
easy to avail and also easy to pay. The bank charges easy and affordable EMIs, affordable
interest rates and the opportunity to liquidate the gold loan at any time.

So now no one needs to worry about cash shortages as the gold assets possessed by anyone
can be pledged to take a loan. The bank will give you cash against the gold assets pledged by
you. The cash received can be used for any sort of business purpose like purchase of an asset
or paying off a liability or for working capital requirements. The loan amount can also be used
for personal expenses like marriage, education of child, building a property, going on a
leisurely vacation, etc. However, the loan amount cannot be used to buy gold coins or jewelry
or for any other speculative purposes as it is prohibited by the bank issuing the loan.
Moreover, the Sampoorna Bharosa Gold Loan issued by the bank is completely at the sole
discretion of the bank which reserves the power to even deny the granting or disbursal of the
loan if it feels that the application is not sound enough. The applicant will have no power to
question the decision of the bank because the bank’s decision to grant or not grant the loan is
absolute and binding.

FEATURES

The loan offered by the bank has the following features:

• The loan sanction and disbursal process is fast and simple. The documents required are
simple in nature and after submitting the necessary documents, the loan is issued instantly.
The documents required to avail the loan are easily available documents like a Passport,
Driving License, Voter’s ID Card, Aadhar Card and PAN Card. These documents are
found with most of the individuals which causes no worries at the time of submission.
• Complete transparency in granting the loan. It means that there are zero hidden charges,
reasonable processing fees and complete clarity on the loan process with up-to-date
information about loan application status at each stage. So when you avail a loan, you can
rest assured that there are no hidden charges which may burn a hole in your pocket and
which are not informed to the customer at the time of loan application. The processing
fees is not proportionately high but corresponds to the amount of loan availed.
• Loans are issued for a minimum amount of Rs.50, 000 and thereafter for higher amounts.
However, in keeping with the requirements of the rural market, loans of values lower than
Rs.50, 000 are also offered to rural customers.
• The loan promises easy liquidity which means that the customer can repay the entire loan
anytime without worrying about the foreclosure charges. Thus, the foreclosure charges are
nil and your gold can be availed any time by repaying the loan.
• The approval of the Gold Loan is made within 1 hour of application both through the
online feature and also for walk-in customers. Walk-in customers are those who choose to
visit the nearest branch of the bank and complete the loan application process. On the
contrary, online customers are those who choose to apply for the loan from the comfort of
their homes without having to undertake the responsibility of visiting the branch and
getting the loan. Loan is granted instantly with minimal documentation and easy
application process
• The gold deposited with the bank is kept with utmost security with no fear of theft or
damage. There is a unique triple layered protection for your gold assets like jewelry and
gold coins.
• Interest rates are competitive with special offers and rates for existing accountholders of
the bank. The interest rate that the bank charges is in tandem with that charged by other
banks and is completely competitive so that customers may prefer HDFC Bank rather than
other banks. Individuals who already have a Savings or Current Account with the bank are
offered differentiated rates and also given the privilege of availing special offers if they
choose to avail a Gold Loan form the bank itself. Moreover, Preferred, Imperia, Classic
and Women customers are also given special and preferential interest rates.
• The loan is granted for agricultural or business or personal purposes. The customer cannot
avail the loan amount to buy gold coins, gold jewels or for other speculative purposes
• The loan is issued for tenure of 6 months up to 4 years. Thus the individual who avails the
loan needs to make sure that the EMI payments will start after 6 months of availing the
loan and has to be completed within 4 years. The individual may choose a lower tenure of
repayment like 2 or 3 years but the period or repayment cannot exceed 4years and the loan
has to be repaid within 48 months or 4 years.
• The bank gives special interest rates and priority processing for the agricultural or the
priority sector. It means that the priority sector or the agricultural sector customers are
serviced with a faster processing time and the rate of interest charges from them is also
lower compared to that charged form other customers.

ELIGIBILITY

• The minimum age of the applicant is 18 years, on the date of the sanction of the loan.
The maximum age limit for a Gold Loan applicant is 70 years. It is the maximum
age limit, within which the loan should be fully repaid. The applicant should consist
of sufficient, regular and continuous source of income for repaying the loan.

• Security – Customer has to provide gold in the form of security.

• Income – Customer has to prove that he or she earns enough income to pay the loan.

DOCUMENTS
To avail a gold loan, the customer needs to submit the following documents.
• A valid Passport - by a valid passport one means the passport which is not yet expires
and is valid. The passport is an important document because it contains the name, age,
address and photograph of the customer.
• A valid Driving License – a valid Driving License is one which has not been expired and
is still valid. The Driving License also contains a host of details of the customer like the
photograph, name, address, date of birth, etc.
• Voter’s ID Card – a voter’s ID card issued by the Election Commission of India is
also required which serves as a valid Identity proof of the customer.
• Aadhar Card issued by the UIDAI which contains all the relevant details of the customer
including biometrics like name, age, address, date of birth, details about the parents, etc.
• PAN Card – a Permanent Account Number Card is a very important document in the
Know Your Customer (KYC) formality because it contains a PAN number which goes in
preventing money-related frauds.

INTEREST RATE

Rates offered to customer during the period of Jan'18 to Mar'18

Bank IRR
Product Group
Min Max Avg

GOLD LOAN 8.96% 15.50% 11.24%

Annual Percentage Rate offered to customer during the period of Jan'18 to Mar'18
APR Min APR Max APR Avg

8.96% 21.34% 11.67%

Note: Service Tax and other Government taxes, levies etc. applicable as per prevailing
rate will be charged over and above the Fees and Charges Loan at the sole discretion of
HDFC Bank Ltd.

LOAN TENURE

This loan comes with flexible repayment tenures, ranging between 6 months and 4
years. PROCESSING FEE

Here is an exhaustive list of all the fees and charges to be paid for the loan:
Fees Amount to be paid
Loan Processing Charges 1%

Rs 250 for loan upto Rs 1.5 lacs and Rs 500 for loan
Valuation Fee
over and above Rs 1.5 lacs

Foreclosure charges 1% Foreclosure charges if closed within 6 months

Charges for late payment of loan 2% p.a. as penal interest over and above applicable rate
amount of interest.

Stamp Duty & other statutory

As per Applicable laws of the State
charges

Renewal Processing Fees Upto Rs 350 + Tax

Prepayment/Partpayment charges Upto 1%

PREPAYMENT CHARGES
If paid from own source- Nil,
In other cases- 2% on principal amount prepaid

LATE PAYMENT CHARGES

If paid from own source- Nil,
In other cases- 2% on principal amount prepaid

SPEED OF SANCTION OF LOAN

The loan will be sanctioned within an hour.

FINDINGS, SUGGESTIONS AND CONCLUSION
FINDINGS

1. According to my study different Banks have widest range of Gold loan products.

2. There are two types of rate one is variable and other is fixed rate on Gold loan.

3. The rate of interest of Gold loan is differ for different banks.

4. People get knowledge about Gold loans from television, internet, Newspaper, Media
or families and friends.

CONCLUSION

For borrowers, gold loans have emerged as one of the best means of raising quick, short-
term capital. For lenders, gold loans are more advanta-geous compared with home and
car loans because of the shorter tenures, lower processing time and cost, and greater
returns due to higher interest rates. These factors, along with appreciation in value of
gold, have led to an explosion in the gold loan market. With everyone wanting a piece of
this action, the organized sector is challenging the large unorganized gold loan market
dominated by pawnbrokers and moneylenders, with NBFCs leading the pack due to
simpler approval and disbursal processes, flexible products and better accessibility.

RECOMMENDATION

The following suggestions are strongly recommended:

✓
To broaden the customer base the vast middle income strata should be fully exploited.
✓
Simplify the procedure, reduce service charges & demand only the basic essential
proof.
✓
Adoption of flexible & more lenient penalty should the
✓
Customer fails to deposit the payment on time. The penalty should be case to case
basis rather than the same for the entire customer base.
✓
Restriction to be reduced to bare minimum for loan advances & for repayment. For
e.g. offers Long term repayment facilities & have no age restriction to choosing
repayment. The maximum age for repayment could be increase to 65-70 years of age.
Such facility will grow fast retail segment of the bank.
✓
Offer multiple repayment loans services. Class to be exploited by offering special
reduced
✓
Rates & linking the repayment from the source where the pay cheque to the employee
is issued. This need to undergo special contract with government organization to
ensure implementation.
BIBLIOGRAPHY

BIBLIOGRAPHY
Books:
• Dr. Prasanna Chandra : Portfolio Management
• C.R. Kothari : Research Methodology

News papers:

• Times of India
• Business Standard

• Websites:www.rbi.org
• www.manappuram.com/
• www.muthootfinance.com
• www.hdfcbank.com
• www.axisbank.com