Gold loans gain popularity In India
Almost every middle-class Indian family owns gold jewelry, which is central to weddings and rituals, and few traditionally have been keen to part with it to secure loans. But with gold prices high, banks have begun to push clients toward gold loans. The transactions have become even more popular as small personal lending dries up because of increasing defaults on risky loans . "India is one of the biggest consumers of gold in the world, and about 90 percent of the gold in India lies with individuals and not in banks," said Biju Pillai, executive vice president of HDFC Bank, which has the major share of gold loans among Indian banks. "But the paradox is that gold is the least leveraged product for loans. We want gold to come out of the closet." The bank's gold loans business grew 55 percent last year, he said. The market is huge, but so is the cultural wall. Over the years, many sensational Bollywood movies have reinforced the stigma, portraying the sale of g...