Rajalakshmi, a home-maker, recently pledged five sovereigns of gold — something she has acquired over the last four years — at a public sector bank in Chennai to meet her expenses. Until COVID-19 broke out, the 48-year-old was working as a domestic help at two houses (earning ₹4,000 a month per house). Her husband was a cook at a small restaurant earning ₹7,000 a month.
“I lost my job last year as many houses stopped allowing housemaids. The restaurant where my husband worked wound up in January; he has just now found another job. I have to pay my daughter’s school fees and son’s college fees. I had some savings which was not sufficient, so I thought I would pledge my gold ornaments for the time being,” she said.
The branch manager of this bank said that before the pandemic struck, the bank had 5-7 people walking in a month to pledge gold; but now customers are stepping in almost every day to avail themselves of these loans.
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Women customers
“More women are coming to pledge gold to help the businesses of their husbands and pay school/college fees and even the hospital bills of their loved ones. The number is going up day by day,” he pointed out.
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In Tamil Nadu, co-operative banks had disbursed ₹30,000 crore in gold loans during the fiscal 2020-21, according to R.G. Sakthisaravanan, Additional Registrar and Managing Director, Tamil Nadu State Apex Co-Operative Bank Limited. The bank had a gold loan portfolio of ₹1,000 crore and the 23 District Central Co-operative Banks had a portfolio of ₹6,000 crore as on March 31 this year.
Normally, the demand for jewel loans would be more during the April-June quarter for payment of school and college fees, Mr. Sakthisaravanan said.
“Most of our branches are working limited hours owing to the lockdown and we are slowly resuming our regular operations. We are expecting our loan disbursement to gain momentum in the coming days,” said George M. Jacob, executive director, Muthoot Finance.
Loan waiver likely
An official said co-operative banks were going slow on gold loan disbursement with a gold loan waiver expected from the State government.
Minister for Co-operation I. Periyasamy recently said the government would soon issue an order for waiving off loans against gold of up to 5 sovereigns, one of the DMK’s election promises.