by NR INDRAN / INT

Mumbai : HDFC Bank, the second largest private bank in the country, on Tuesday announced the launch of ‘Bharosa Gold Loan’, a product tailor-made for the rural customer. This is an important step in the Bank’s mission to provide ‘Viable Finance’ to the millions of underprivileged who do not have access to credit lines offered by organized finance channels.

HDFC Bank has weaved in the most secure processes into ‘Bharosa Gold Loan’ drawing from customer insights and its experience in handling the widest repertoire of sophisticated financial products in the country to ensure that the customer gets the right valuation and his gold is safe. In a first in the industry, the product will offer a loan amount of up to 140% of gold’s valuation.

Over the next six months, the Bank will take ‘Bharosa Gold Loan’ to 1300 branches in over 950 locations across the country. A vast majority of this expansion will take place in semi urban and rural regions. The objective is to cater to 5 lakh potential rural and underprivileged customers in 10,000 villages, aiming to meet their credit needs and help move into mainstream banking.

As part of the process, the customer is given a detailed valuation certificate mentioning a) the itemized description of Gold, b) weight and c) amount lent. This is then signed by the customer and the Bank to ensure complete transparency. Every customer is met by a bank officer to ensure customer education on the loan prior to taking the funds. Finally, the jewellery is sealed in a three-layered tamper-proof manner and put in a vault, in line with the best safety standards. Further, the bank contacts the customer on maturity to help the customer renew the loan or repay. This communication ensures customers do not miss their maturity date and risk sale of their gold in the custody of the bank.

Mr. Biju Pillai, Senior Executive Vice-President & Business Head, said: “It is estimated that Indian households have privately held gold stocks of 18000 tonne. However till now, the lion’s share of this was either lying idle or being pawned to moneylenders at exorbitant rates. We, at HDFC Bank, are committed to making a difference to people’s lives and Bharosa Gold Loan will be a key element to unlock value for millions of families.” Most customers use this loan for productive purpose, thus helping them improve their financial status while adding to the economy.” He added: “With the entry of organized sector into Gold Loan, consumers have begun to seek Gold Loans from Banks and NBFCs rather than from traditional moneylenders. As this shift gathers momentum, the Gold Loan market is set for strong growth.

Mr. Dhiraj Relli, Branch Banking Head, South-2, said: “While we’re rolling out ‘Bharosa Gold Loan’ nationally, we’ll ensure that it is available in every part of rural Kerala through our rapidly expanding branch network. We’ll use gold loans to bring more customers into mainstream banking, particularly in smaller, developing regions of the state.”

HDFC Bank has a Board-approved plan to bring 10 million families into the banking fold in five years through its ‘Viable Finance’ initiative. As part of this, the Bank has held over 400 Grameen Loan Melas in the hinterland in the last two years, extending credit in the form of Two-Wheeler Loans, Commercial Vehicle Financing, Gold Loan, etc, to people who require them the most. Last November, the Bank tied up with Vodafone to take banking to the unbanked millions of the country, riding the crest of mobile banking.

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