India Financing Heats Up On Gold Fund Collaterals
Source: Commodity Online (6/2/11)
"In the past few months, India's banks have started giving loans against gold funds, popularly known as paper gold."
With gold prices breaching the roofs, physical gold is already the best collateral that would meet immediate needs of the person who pledges the same. But who has thought of gold funds increasingly becoming collateral in India?
In the past months, India Infoline, Religare Securities and Reliance Commercial Finance have started giving loans against gold funds—popularly known as paper gold, reported Business Standard.
Reliance Commercial Finance (RCF), a part of Reliance Capital, recently launched its first-of-a-kind initiative of offering loans against Gold units held in paper form.
These loans, being offered by RCF, are part of an exclusive tie-up with Reliance Mutual Fund and would initially be available to investors of Reliance Gold Savings Fund only.
"We strongly believe that Gold Funds have opened an entirely new avenue for offering loans to customers. We expect this segment to ramp up aggressively as investors start embracing this form of gold for future investments" said Srinivasan CEO, RCF.
RCF would be offering this facility across 17 locations like Delhi, Kolkata, Mumbai, Ahmedabad, Chennai, Bangalore, Hyderabad to name a few of them and would roll out across all other regions subsequently—the company would be offering loan upto 90% of the value of Reliance Gold Savings Fund gold units held by the investor.