Preview

The Inner Workings of a Gold Loan

Best Essays
Open Document
Open Document
4241 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Inner Workings of a Gold Loan
“Gold Loans- The Old Concept in a New Package”
Introduction:
It has been observed recently that Indians own more gold than the citizens of any other country. They use the glittering metal as ornaments to flaunt family wealth, as a source of retirement savings and as insurance against calamities.
Gold and domestic savings: In rural areas in India, due to the lack of access to banks the poor continue to invest their savings mainly in gold. Also, there are strong cultural factors at work in India which make gold not only a desirable but also a necessary asset to hold.
But lately, gold has become something else: collateral, and the basis of one of the country’s fastest growing businesses, gold loans. It is therefore an apt moment to acquaint the reader with an insider’s perspective on why gold loans matter and why they hold so much promise for our country’s future. The purpose of this paper is to present a consolidated review of the various facets of the gold loans spreading with speed in India to the readers.

Gold Loan:
Gold loan is a secured loan issued by lenders against gold as the undersigned asset. Gold loan gives an opportunity for people to liquefy the value of their jewelry items and use it for financing purposes.
Rise in gold prices have increased the disbursal of Gold Loans in the middle and upper middle class. With changing times working women are becoming financially independent and taking active part in decision making process. They are working in unison with their husbands to ensure a bright and secured future for their family. As the couples are well employed, they seek to return the principal even within a month of receiving their salary. They are now using such loans to finance their children’s education, (particularly for meeting donation demands), which a bank will not entertain, car purchases, holiday trips or even to put up margin money for a home buy.
The loan process begins once the gold is deposited with the lenders. After a ‘purity’



References: 3. The Economic Times, newspaper article published on July 29, 2010 4

You May Also Find These Documents Helpful

  • Good Essays

    Gold is something that you actually have to put effort into, in order to get it from the earth. It's not free to harvest, it takes time, energy, and money. For this reason, it always retains its value in times of economic trouble. Some even believe that the United States should go to a completely gold standard, getting rid of the Federal Reserve and getting away from printed money. This would restrict the government to only spend the money that they actually have in their possession, so debt and inflation would be controlled and we would not have economic collapses like we see today. Recessions are still possible on a gold standard, but they would not be nearly as severe. In fact, most people don't know that in the last recession, we were threatened by a Great Depression but by bailing out the banks and the car industries, we avoided that but only temporarily. One day, the recession will return and if you have invested in buying gold coins, you will have money by your side to support…

    • 444 Words
    • 2 Pages
    Good Essays
  • Good Essays

    states of Ghana, Mali, and Songhay all depended on gold as a major item in trade, while also…

    • 777 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Hernan Cortes

    • 1908 Words
    • 8 Pages

    Source: Miguel Leon-Portilla, "The Spaniards See the Objects of Gold", Broken Spears, 1962.They gave the "gods" ensigns of gold, and ensigns of quetzal feathers, and golden necklaces. And when they were given these presents, the Spaniards burst into smiles; their eyes shone with pleasure; they were delighted by them. They picked up the gold and fingered it like monkeys; they seemed to be transported by joy, as if their hearts were illuminated and made new. The truth is that they longed and lusted for gold. Their bodies swelled with greed, and their hunger was ravenous;…

    • 1908 Words
    • 8 Pages
    Good Essays
  • Good Essays

    Dbq Indian Removal Act

    • 753 Words
    • 4 Pages

    In 1828 gold was discovered in North Georgia near Wards Creek. When the Native American discovered the gold it had no monetary value to them.…

    • 753 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    I don't have one

    • 324 Words
    • 2 Pages

    Idea of “keep all the gold in the country” (Bullionist idea) led to promotion of a strong self-sufficient economy.…

    • 324 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Kite Runner Guilt

    • 239 Words
    • 1 Page

    In The Kite Runner, I noticed that one of the most major themes is living with shame and guilt. Throughout the novel, Amir constantly finds ways to believe that people are ashamed of him, and he always finds reasons to feel ashamed. My first example of this is the relationship between Baba, Amir’s father, and Amir. Baba has very different expectations for Amir compared to Amir’s interests, and what Amir really wants out of life. Amir is not friends with the people that Baba wants him to be friends with, such as Assef, who is nearly the ideal son to Baba. Assef plays sports, and, when need be, can summon incredible manners and be polite, such as when he had spoken to Baba at Amir’s birthday party. Amir, on the other hand, doesn’t like Assef,…

    • 239 Words
    • 1 Page
    Good Essays
  • Satisfactory Essays

    Like many people here in England, you might be thinking about moving to the colonies in America.But is really worth it?That is the question many are asking, but the problem is that communication between the new world and the old world is often time corrupted , leading to many misconceptions. But don’t worry because after carefully researching , we have finally determined what life is like in the middle colonies.…

    • 98 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    Gold would give a country trade and money. Gold inspired many expeditions. In 1513 Juan Ponce De Leon went to Florida in search for gold. Hernan Cortes also went to North America in 1519 to conquer locals and find gold. For example, Jamestown, Virginia was founded for the hopes of finding gold. Gold would also come with the finding of a Northwest Passage. Gold equaled power for these men and this led to the next big motivation, Glory.…

    • 355 Words
    • 1 Page
    Good Essays
  • Good Essays

    California Gold Rush

    • 928 Words
    • 4 Pages

    Local banks fulfilled this need by providing a safe and reliable place for one to store their gold, and would then give out what was called “banknotes”, similar to the modern U.S. dollar, in order to easily retrieve ones gold when it was needed. The closer the issuers of said banknotes were to the miners, the more reliable they were, so many outside of the California Gold Rush did not have the best of reputations, which caused an unstable economy during the earlier days of banking. Even due to this fact, the privately owned competing banks in areas such as California faced fierce competition with these local banks. The most important role that these banks had were to create a sort of ‘middleman’, providing a cash substitute in the form of their “banknotes”, as well as showing the importance of such intermediaries in a new and growing economy that would be later called the California Gold…

    • 928 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    They were promissory notes or IOUs. Gold or silver was real money as it had intrinsic value. Notes were just promises to pay in coin. UK banknotes, like those of many other countries, still include messages like this, signed by the Chief Cashier of the Bank of England: 'I promise to pay the bearer on demand the sum of ten pounds'. So, 'as good as gold' ought really to be 'as genuine as gold', but the more usual meaning of 'good' has taken precedence over the years and left us with the usual meaning of the…

    • 1401 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    As the text explains in “A Downward Spiral” and “The Banking Crisis,” the middle class began to hoard gold. This exacerbated the problem with liquidity in the market as it was. The country’s monetary system was based on a gold standard. Money supply, or contraction, was based on available gold. This limited the government’s ability to inject needed stimulus into the economy to spur investment when it was needed.…

    • 425 Words
    • 2 Pages
    Good Essays
  • Good Essays

    When I took my first success profiler in the beginning of my freshman year, I was okay with my score and looked at it as a starting point, expecting natural progression. As any eighth grader would be, I was more than ecstatic. .Now I have experienced all the wonderful perks of being a freshman, and have a very different point of view than I did when I was fresh out of middle school. Ninth grade had an incredible impact on my mindset, and it was difficult to say the least. An enormous workload, early mornings, sleepless nights, and the level of patience that was required forced me to address problems I didn’t even know existed. The hard work made me identify the reality of high school. In order to analyze my development or decline, I will compare and contrast my old and newest maps, highlight improvements, and set goals for the following year.…

    • 756 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Gbe India vs China

    • 16257 Words
    • 66 Pages

    Prasanta Sahu and Anant Vijay Kala, 2012. New Rules for India 's Borrowers [online]. Available…

    • 16257 Words
    • 66 Pages
    Powerful Essays
  • Good Essays

    economy, and that the financial sector is useful only to the extent it helps deliver stronger and…

    • 5497 Words
    • 32 Pages
    Good Essays
  • Powerful Essays

    Aditi

    • 4147 Words
    • 17 Pages

    Metabolic..; The chemical processes occurring within a living cell or organism that are necessary for the maintenance of life. In metabolism some substances are broken down to yield energy for vital processes while other substances, necessary for life, are synthesized.…

    • 4147 Words
    • 17 Pages
    Powerful Essays

Related Topics