Published On : Wed, Sep 4th, 2013

Ban on gold loan turns borrowers into sufferers in Nagpur, Jewellers reaping rich benefit

Representational picture

Representational picture

Nagpur News: A woman who borrowed Rs 1,25,000 against her 105 gms gold biscuit from HDFC bank’s Dhantoli branch in Nagpur was in for the shock of her life when she called up at the branch to inquire about the interest she need to pay for the current month. To her dismay, she was informed that the loan has been withdrawn owing to the central government’s recent directives to ban loans against gold coins and biscuits. She was asked to get the amount cleared without any further delay.

The central government’s recent order on banning loans against gold has left hordes of people in a fix, especially the existing borrowers. The existing borrowers are being communicated to repay the entire amount as early as possible.

The concerned woman rushed to the branch where the bank’s representative informed her to repay the borrowed sum and take back the gold she kept as mortgage with the bank. The woman could not utter anything as she was worried from where she would arrange the amount. The representative passed the buck to policy decision. The representative got her to speak with his senior when the woman insisted. The senior employee could not help much except extending the time limit to three months to pay back the loaned amount. He informed that all the similar customers have been intimated by the bank through letters.

The woman denied receiving any such correspondence and so asked for the extension till 6 months. The concerned employee informed that her request would be sent to the head office and if it is not considered there, then she would have to pay back in three months to get her gold biscuit back.

Stressed over the situation, the woman first asked her kin for help but to no avail. She helplessly approached a jeweler who indicated that she need to keep at least 70 gms of gold against desired loan of Rs 1,30,000, in addition to the monthly interest at 3 percent. The woman could not move much under such a mess and helplessly kept another set of her jewellery to close down the loan case.

Jewellers lowered price

It is interesting to note that when this woman approached TBZ jewelers with her ornaments, the showroom’s accountant offered to buy only at Rs 29,000 per 10 gms whereas yesterday’s rate was Rs 31,000. Sensing the urgency, many of the jewelers are making merry and reaping rich benefits out of buying gold from similar such customers moving into their shops to arrange for money to clear their gold loans. When the woman inquired with another jeweler with whom she had kept her some gold against loan, she was told that the market rate is 31,000 but he would offer only Rs 30,000. Here too the woman had to compromise and relent over the proposed rate after selling 50 gms of gold.

Volatile market turns gold fluctuating

The unstable rupee in the market has already cast havoc over the market and the fluctuating gold prices have crept in to bother common buyers. The sale and purchase have come to standstill for over a fortnight. And such a decision has only added to the woes of common people who have taken loans against gold. The private bank, jewelers and local money lenders have booked busting benefits from the current scenario. Sources informed that these people have been purchasing gold at as low as Rs 2000 below the existing rates. A sharp difference of Rs 1000 and Rs 2500 is being observed in the purchase of gold coins and gold ornaments respectively, by the said profit makers.

Meanwhile, the gold loan borrowers are left in a tizzy and every passing day renders them more worried over the gold valuables they have kept in banks against their loans. The borrowers fear that they could lose their gold if they could not repay the amount within such a short span.