It has been 40 days since lockdown. Many people in the country are struggling with a cash crisis due to income affected due to lockdown. In such a situation, the demand for gold loan has increased rapidly. Lenders are also promoting gold loans in view of the prevailing circumstances. Due to a significant increase in the price of gold, customers are able to apply for a loan of more amount through a gold loan.
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India is the second-largest consumer of gold after China. Here a large number of people keep gold in their homes. Due to the strong social welfare system and lack of widespread access to formal credit, gold works like an insurance policy and retirement plan in this country. The 40-day lockdown implemented to prevent the spread of coronavirus infection in the country has forced many Indians to take gold loans.
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PR Somasundaram, India's managing director at the World Gold Council, said in an interview that "gold recycling and gold loans are expected to pick up in the next few quarters". He further said, 'There will definitely be strong growth in this area for two reasons. The first is that the prices of gold are constantly increasing. Therefore, they will be able to get more money for the same amount of gold. Secondly, banks will not be in a position to give loans without strong security in this situation of economic crisis, so they will encourage gold loans.
