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For 45 year-old Vijay Kumar who runs a travel agency, business has been bruised due to Covid, with cash flows completely wiped off and lenders queuing up. It is an existential crisis and every rupee coming in is most welcome.
He took an ultra short term bridge loan to settle his gold loan. Upon retrieval, he sold the gold, repaid the bridge loan and pocketed some money too.
With the price of gold rising sharply, gilt lenders see increasing instances of customers coming forward to settle the old pledges, only to sell the jewellery for higher value and take home some money
“Yes, with the price of gold rising to historic highs in India, we have been seeing instances of customers choosing to redeem their pledges in order to sell the jewellery as scrap and take advantage of these unprecedented prices,” said VP Nandakumar, MD & CEO, Manappuram Finance, one of the large lenders against gold.