THE CURIOUS CASE OF GROWTH IN GOLD LOANS AS REDEMPTIONS SPIKED
UNIQUE TIMES|June - July 2020
Amidst this widespread risk aversion, only the gold lenders stood firm and kept their doors open for everyone. Even during the lockdown, when most lenders had stopped lending, gold loan companies were disbursing fresh loans through digital modes. Safety, or worries about likely defaults, is not an issue for the gold loan companies as the gold collateral (i.e. the jewellery pledged by borrowers) is held in the custody of the lenders and can be easily liquidated in the event of default.
Shri V.P.Nandakumar
THE CURIOUS CASE OF GROWTH IN GOLD LOANS AS REDEMPTIONS SPIKED

Soon after the first phase of the lock-down was over and NBFCs were allowed to resume operations at their branches, there was much interest in the financial media about how gold loans would hold up in the current scenario where economic activity is at a low and GDP growth is heading into negative territory.

The expectation was that the demand for gold loans would surge in keeping with the wider observation that most lenders in India have become risk-averse and were focused on reducing their exposure to vulnerable customers. This is, of course, the direct outcome of the nationwide lockdown which effectively shut down the economy and which was aggravated by the RBI’s moratorium package, which led to a flight to safety among banks and NBFCs alike. Consequently, small borrowers and businesses were being starved for want of debt capital, be it to restart operations, or pay wages. Their working capital cycle was stretched to breaking points.

Amidst this widespread risk aversion, only the gold lenders stood firm and kept their doors open for everyone. Even during the lockdown, when most lenders had stopped lending, gold loan companies were disbursing fresh loans through digital modes. Safety, or worries about likely defaults, is not an issue for the gold loan companies as the gold collateral (i.e. the jewellery pledged by borrowers) is held in the custody of the lenders and can be easily liquidated in the event of default.

Denne historien er fra June - July 2020-utgaven av UNIQUE TIMES.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra June - July 2020-utgaven av UNIQUE TIMES.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA UNIQUE TIMESSe alt
Bhutan: The Enchanting Jewel Of The Himalayas
UNIQUE TIMES

Bhutan: The Enchanting Jewel Of The Himalayas

Majestic snow-capped mountains, picturesque valleys, verdant forests, centuries-old Buddhist shrines and monasteries, fluttering prayer flags, a serene way of life and folks boasting the best happiness index in the world...this Land of the Thunder Dragon has much more to entice those with wanderlust.

time-read
6 mins  |
October - November 2024
Bail - Emerging Trends In The Context Of Money Laundering Laws
UNIQUE TIMES

Bail - Emerging Trends In The Context Of Money Laundering Laws

The Hon'ble Supreme Court in case of Manish Sisodia Vs Directorate of Enforcement 2024 SCC Online 1920 has upheld certain key propositions that where a trial has not merely been delayed but has not even commenced after a long period of incarceration, the same would be violative of Article 21 of the Constitution of India.

time-read
5 mins  |
October - November 2024
Toyota, Maruti Suzuki Boost Hybrid Vehicle Sales in Uttar Pradesh Amid Tax Waivers, Spark Industry Debate
UNIQUE TIMES

Toyota, Maruti Suzuki Boost Hybrid Vehicle Sales in Uttar Pradesh Amid Tax Waivers, Spark Industry Debate

Toyota and Maruti Suzuki are ramping up marketing efforts for hybrid vehicles in Uttar Pradesh, leveraging new state tax waivers that offer buyers savings of up to $15,800 on luxury models like the Toyota Vellfire.

time-read
1 min  |
October - November 2024
Supreme Court Rejects AAP Government's Plea to Expand NRI Quota in Punjab Medical Colleges
UNIQUE TIMES

Supreme Court Rejects AAP Government's Plea to Expand NRI Quota in Punjab Medical Colleges

The Supreme Court rejected the AAP-led Punjab government's plea challenging the High Court's ruling against expanding the ‘NRI quota’ to include distant relatives for medical and dental college admissions.

time-read
1 min  |
October - November 2024
USA's Delaware Supreme Court Confirms Byju's Default on $1.2-Billion Loan Amidst Ongoing Insolvency Proceedings
UNIQUE TIMES

USA's Delaware Supreme Court Confirms Byju's Default on $1.2-Billion Loan Amidst Ongoing Insolvency Proceedings

The Delaware Supreme Court has upheld a ruling that edtech firm Byju's defaulted on a $1.2 billion Term Loan B (TLB), validating claims made by US-based lenders.

time-read
1 min  |
October - November 2024
India Approves Rs 3,300 Cr Semiconductor Packaging Plant in Gujarat, to Boost Chip Production
UNIQUE TIMES

India Approves Rs 3,300 Cr Semiconductor Packaging Plant in Gujarat, to Boost Chip Production

The Union Cabinet has approved a Rs 3,300 crore proposal from electronics manufacturer Kaynes to establish a semiconductor packaging plant in Sanand, Gujarat.

time-read
1 min  |
October - November 2024
Thar Roxx: Your Perfect Off-Road Companion
UNIQUE TIMES

Thar Roxx: Your Perfect Off-Road Companion

To say that Mahindra knows the Indian customer really well, will be an understatement. Their biggest hits have come in various forms over the years, from the XUV500 to the XUV700 and the Scorpio N in recent times.

time-read
3 mins  |
October - November 2024
Exfoliate Your Way to Flawless Skin
UNIQUE TIMES

Exfoliate Your Way to Flawless Skin

Imagine waking up to smooth, glowing skin every day—skin that feels soft to the touch and looks naturally radiant without the need for heavy makeup or filters.

time-read
3 mins  |
October - November 2024
The Stinking Rose: Flavourful and Full of Health
UNIQUE TIMES

The Stinking Rose: Flavourful and Full of Health

Garlic, the humble bulb with a pungent aroma and a rich history dating back thousands of years, has earned a reputation not only in culinary delights but also as a powerhouse of health benefits.

time-read
2 mins  |
October - November 2024
Never give up!
UNIQUE TIMES

Never give up!

In the earlier stage of your life, it was someone else who might have been gravely instrumental in shaping your viewpoints. Hence, it is supremely important to re-evaluate what you believe in, when you become an adult.

time-read
4 mins  |
October - November 2024