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Syndicate Bank relaunches gold loan scheme

Mahesh Kulkarni  |  Chennai/ Bangalore 

Syndicate Bank, the Manipal-headquartered 7th largest public sector lender, has widened its personal loan portfolio with the relaunch of its gold loan scheme,

The bank, under the new scheme, is aiming at a disbursal of Rs 1,000 crore during the present financial year. Under this scheme, one can pledge the gold and raise the loan required for a maximum period of two years.

The bank is offering this loan for an interest of 13.5 per cent as compared to the earlier 15.5 per cent during last fiscal. It will lend upto Rs 850 per gramme of gold. The bank has opened single windows at 300 designated branches across the country for the quick appraisal of gold jewellery and disbursal of loan amount.

The scheme will be extended to around 700 branches by end of the present fiscal. There is no ceiling on the loan amount and no penalty is charged for pre-closure of the loan account and the interest is calculated on the reducing balance.

George Joseph, who took over as the new chairman and managing director of the bank told Business Standard: “As part of our efforts to adopt a ‘Blue Ocean Strategy’ (creating uncontested market space), we have been introducing new products and is one such scheme, which is not openly encouraged by public sector banks. For the first time, we are taking the gold loan product to the mass market in cities. Earlier, it was restricted only to rural areas where farmers were pledging gold to raise loans for meeting their agriculture requirements. But, now we have extended it to urban customers at competitive rates.”

“With this scheme, we want to help customers avoid private money lenders who charge between 18 per cent and 24 per cent depending on the tenor of the loan. Our single window will disburse the loan in five minutes,” Joseph said. However, the bank will charge a processing fee of Rs 1.50 for a loan amount of Rs 1,000.

During the financial year 2008-09, Syndicate Bank is aiming at a disbursal of Rs 1,000 crore, which is a growth of close to 17 times over last fiscal’s growth for this product.

First Published: Thu, August 07 2008. 00:00 IST