Avail Loan up to 1 Crore.

Pledge your Gold Ornaments or Jewellery and  draw cash against it.

Depending on the net weight  and purity of the gold, cash will be disbursed.

We have various schemes that will enable you to make your favourable choice !

Attractive features:

 Loan availed in 5 minutes.

 When disbursing Gold Loan, we only require any ONE of your recent ID: Voter ID, Ration Card, Driving License or Passport and no other documents

are required from you that can be time consuming.

 Avail the Highest Amount of Rs. 1,875* per gram of Gold.

 Diminishing interest rates starting from 1% per month. Pay interest only for the number of days your pledge is maintained with us.

 Various schemes for your needs and to suit all income group.

 No other hidden charges.

 No end user restriction

Extended service - Sunday and Overlight Loan facility

Please visit your nearest branch of Manappuram Finance to avail Gold Loan.

The company operates with more than 1,400 branches across India with presence in 16 Indian States.

For Branch Network, log on to : http://www.manappuram.com/branches

Alternatively, SMS `GLOAN` to 56070. 

Customer Service /  Gold Loan Department

Mr. Raju Narayanan (DGM) / Manikandan (M)

Mob: 093874 39482, 099461 45679

Email: customerservice@manappuram.com

Mumbai: For banks, loan against gold is a glittering business as monetisation of the yellow
metal is on a fast track in the country.
There is growing interest among banks and non-banking finance companies (NBFCs) to expand
this business that has so far been a strong domain for the traditional players.

This monetisation process will open up the sector and enable the circulation of roughly 18,000
tonne (worth approximately Rs 30 lakh crore at current prices) back into the economy, said Ajay
Mitra, managing director- India, Middle East & Turkey, World Gold Council.

“Acceptance of gold for loans by banks and financial institutions is an important development
that will infuse greater confidence in gold as an asset class. With banks entering gold bar
business, availability of infrastructure for storage, and with medallions being accepted for
securitisation purposes, the role of gold is surely bound to change from a commodity to a
monetised asset that would encourage consumers to invest more in gold, a time-tested secure and
now a monetised asset class,” added Mitra.

The State Bank of India (SBI), Andhra Bank and HDFC Bank have already made their forays
into the segment in a big way.

NBFCs like Mannapuram General Finance and Muthoot Finance are also aggressively expanding
their base in this segment.

The total estimated market size of loans against gold is pegged at Rs 1,20,000 crore where the
organised sector like banks and financial institutions have almost 50% of market share. The rest
goes to NBFCs and small players like money lenders. SBI has a loan portfolio of Rs 300 crore
against gold.

Biju Pillai, executive vice-president & business head, gold loans, HDFC Bank, said: “The bank’s
portfolio has been growing at over 60% year-on-year for the last two years. With the opportunity
being vast, we will continue to look to grow this portfolio. We plan to increase the number of
branches offering gold loans from 150 to 600 over the course of next year.”

With the rate of interest between 12% and 15.25%, the interest rate varies along with the tenure
of the loan and borrowers’ relationship with the bank, added Pillai.

State-owned lender Andhra Bank, with just eight-month experience in the segment, has
ambitious plans to bring all of its branches to disburse loans against gold within a couple of
months.

The idea is to allow farmers to borrow against gold and jewellery under crop insurance cover. It will enable them to
repay the loan to banks even in case of a crop failure for they would have the benefit of insurance compensation
Since crop insurance is not built into loans at present, banks are reticent about providing farm loans fearing non-
payment owing to crop failure.

Under the new scheme, crop insurance and loan would be available through a tripartite agreement among the farmer,
the insurance company and the bank.

Jewellery as security and crop insurance would motivate most banks – private, state-owned and cooperative banks to
provide farm loans

At present, Oriental Bank of Commerce (OBC) provides crop loans up to Rs 3 lakh at 7 per cent against gold as
security. Banks such as ICICI Bank and Punjab National Bank (PNB) do extend loans against gold up to Rs 1500,000
but at higher interest rates as those not farm loans.

mortgage of jewellery will be a security for the banks providing loans to farmers and insurance will help farmer take
care of costs if crop fails."

farmer taking a loan against jewelry has to give an undertaking that the loan is being taken for agricultural purposes.
The bank would keep some documentation such as copy of land holding so long as such loans are not covered under
crop insurance. If crop fails, the farmer is in a quandary as the entire liability would be his. So, the insurance is
necessary.

Under the new scheme, the farmer may be able to access loan up to 80 per cent of jewellery value pledged with
banks. At present, banks give loans only up to 30-40 per cent of the value of the jewellery.

Also, the interest rate on these farm loans against jewellery as security may be slashed to 5 per cent against 7 per
cent at present.

M Anjaneya Prasad, general manager (Mumbai zone) of Andhra Bank, said, "We have projected
the target to achieve Rs 50-crore loan disbursement as against Rs 10 crore in 2009-10.''
Currently, 60 branches of the bank provide gold loans.

"We are planning to involve all the branches of the bank for the business by June.'' Andhra Bank
normally provides 75% of value of gold pledged as loan and is planning to have one valuer per
branch for the appraisal of gold while finalising loans.

The fee to be charged by the valuer is to be borne by customers themselves, added Prasad.

A senior official of Mannapuram General Finance, which has specialised in loan against gold,
said on the condition of anonymity that the company has projected to achieve a business growth
of Rs 4,500 crore under the segment as against Rs 2,550 crore in 2009-10.

"Thus, we are looking at a business growth of 50-100% under the segment during the current
financial year,'' said the official.
The rate of interest for the NBFC varies between 12% and 21% depending on the value of the
gold pleged.

Though the repayment period can be stretched to one year, in most of cases, Mannapuram gets
its loans repaid by customers over a period of 100 days,

Conventional

 Loans against Gold ornaments. 

 Rs.1250 per gram of gold for all types of jewellery (including hall marked jewellery).
 Amount of Loan - Maximum 10 lacs
 Period of loan - 6/12 months and can be further renewed 
 Simple easy documentation. 

Liquid gold - SBT Gold overdraft

 Overdraft facility against pledge of Gold ornaments, operated as a running account

with facility of cheque book. 
 Rs.1250 per gram of gold for all types of jewellery (including Hall marked jewellery)
 Amount of Loan - Maximum 10 lacs
 Loans are granted for 6/12 months and can be further renewed.

Manappuram Gold Loans- Personal loan

against gold: A financing option for short
term needs
y

For Indians, gold is considered as an essential

investment from a cultural, emotional and safety perspective. One
bought, is a dead investment. It tends to lie in the locker not earning
you any money. Why not make use of it in your time of need? You
can monetise this idle asset to help you tide over your financial need.
So if ever you find yourself in need of money, consider gold loans as
an option. Gold loans also know as gold deposits are loans given by
banks/ NBFCs by taking gold as a security.

Gold loans are not new to the Indian market. It existed but in the
unorganised sector where money lenders used gold as a security for
providing loans. Now banks have entered this space in a big way
because the market is very large considering the fact that most
Indians tend to have sufficient investment in gold. More importantly,
with more and more women working in the family, people have
become broadminded. So the social stigma that was once attached to
taking a loan on gold is gradually being eliminated.

Off late, this product has become popular because of the substantial
rise in gold prices. The quantum of loan that one can get by giving
gold as security has increased tremendously making it an attractive
loan proposition.

What is the process to be followed to obtain a gold loan?

You offer your jewellery to the lender who can be a bank or an NBFC.
The lender will evaluate the purity of the jewellery. The charge for
evaluation is generally borne by the borrower. Once the evaluation is

done, the paper work for the mortgage is done. Banks will ask you to
produce personal documents such as Pan Card, address proof
among other things. The lender will give you a loan which in most
cases can be up to a maximum of 80% of the value of the jewellery.
After having repaid the loan, you get your gold back from the lender.

Features
o

Secured Loan: Gold loan is essentially borrowings against the

security i.e. gold. Thus this loan should be taken only if you¶re absolutely sure that you will be
able to repay the loan else you may end up losing your gold.
o

Tenure: Gold loans are typically for duration of 3 to 12 months.

They are thus best used to fund short term monetary
requirements.
o

No end use restrictions: The loan can be taken for any

purpose so long as the money is not being used for speculative
purposes
o

Loan amount: In most cases, the maximum loan value is not

more than 80% of the value of gold. Most banks deal in

relatively higher loan amounts. NBFCs on the other hand, deal
in small value loans
o

Interest Rate: The interest rate charged by banks can be in the

range of 11.5% and 15%. Banks usually charge a processing

fee while NBFCs may not charge the same. The rate of interest
charged by NBFCs is much higher as compared to banks.
o

Repayment: The loan can be foreclosed at any time without

any penalty. In case of irregular payment of EMIs, a penal
interest of up to 2% is charged by banks.
o

Market risk: The lender retains the exposure to the market risk
arising from movements in the market price of gold
Advantages
o

Quick processing: Gold loans require minimum

documentation and hence it can be resorted to in times of

urgent need. Banks maintain that it takes a few hours to get a
gold loan and in NBFCs like MANAPPURAM FINANCE
(GOLD LOAN SUPER COMPANY) it takes only a few
minutes.

More attractive than a personal loan: The rate of interest

charged on gold loans tends to be much lower than that of a

personal loan. Therefore, it may be worthwhile putting you
asset to work and thus reducing your cost of loan.
o
Emotional attachment will ensure timely payment:Most

families have an emotional attachment to gold and that will

make you morally responsible to repay the loan in time so that
you can get back the gold that you had placed as a security
o

Cash flow management: In a typical loan against gold

transaction, only interest needs to be paid during the tenure of

the loan and the principal amount has to be repaid at the end of
the tenure. This allows customers the borrower to manage cash
flows better.

In times of need of money for a short duration, you can resort to gold
loans. Let your asset that you have built over years; be of use to you
when you are undergoing a financial strain. Note that you should take
a gold loan if and only if you are sure of repaying the loan in time.
Else you may end up losing your most treasured asset.

MANAPPURAM FINANCE PROVIDES HIGH VALUE AT LOW RATE

www.manappuram.com
Raghu.G , AGM , 09847715645

A: We are essentially a gold loan company. So the capital requirement is to fund our business growth in
gold loan.
Q: Isn¶t the capital adequacy at the moment 12% and it has to be increased to 15% from the next
April 1 or is it already 15%?

A: It is much above 15% now. Our expectation is that the current year will reach a size of Rs 7,000-7,500 crore. We are planning
ahead, so there will not be any shortfall in regulatory capital at any point of time. We will be well ahead of that. Even if we raise
during the last quarter, we will not be falling short of our capital adequacy requirement.

Q: That would mean a huge spectacular rise in your loan book from Rs 4,000 to 8,000 crore in
FY11. What would happen in FY12 and what would that do to the net interest margins as well?
A: Net interest margins that we enjoy are around 3-4%. We are hopeful that it will be maintained at that
level of 3-4%.
Q: If you looked at your average quarterly balances, your net interest margin looks much better. It
looks almost 17-18%.
A: One thing, which has to be included, is the asset taken away by bilateral assignment. If that is
included, the net interest margin is around 4-5% only. The balance sheet what you see is the asset after
the bilateral assignments taken out.
Q: Does it mean that when people don¶t pay back the loan, you are able to sell off the gold and the
money made on that, is that what you are saying?

A: It is not like that. The money is raised either through onbook funding or offbook funding like bilateral assignment. When we
raised money through bilateral assignments, the asset is taken out of our books and the buyer of that asset, the assignee of that asset
that is bankers-in the bankers¶ book these assets will form part. When you take that into account also, then the net interest margin
is around 4-5%.

Q: What would all of this do to your asset quality? Where do you hope that the gross non- performing asset (NPA) levels would
stand at by FY11? How are the spot prices if at all affected the business? We understand that a major chunk of the increase in net
profits is because of the increase in spot prices as well? Can you give us more clarity on that?

A: It is not like that. Whether the price of gold increases or decreases, that doesn¶t affect our profitability
at all. Only the value of the collateral perhaps increases. We are not merely lending against bullion, we
are lending against bullion plus.
This plus is a sentimental attachment for an average borrower. Our ticket size is around Rs 25,000 only,
and the average loan durations are 100 days. Whether the gold price goes up or goes down for an

average customer whose ticket size is Rs 25,000, the average loan is for a period of three months. These are also household
jewelry ± the price volatility is neither a cause of concern nor is it a contributor to profits.

Q: Do you want to stick to the gold business or if and when licenses get opened up, you will want
to apply for a banking license or expand your business beyond gold?