Bank of India gold loans for jewellers

In a first of its initiative in Gujarat, Bank of India has launched a new scheme providing gold as loan to goldsmiths and jewellery manufacturers.

The proposed scheme 'Star Suvarnakar Suvidha' scheme would offer a loan of Rs 5 lakhs for procuring 500 grams of gold at a rate of interest of 9.5 per cent.

The gold being loaned has been certified by the government of India as 24 carat gold. The goldsmiths would be charged a flat sum of Rs 10,000 per month with a repayment period of five years.

"The scheme would benefit the goldsmiths considerably since the rates charged by the bank are much lower than those charged by money lenders and other gold dealers, "said A R Kuppuswamy, Zonal Manager, Bank of India.

Of the total 1.5 per cent premium for the loan, the bank would be sharing half the burden at .75 per cent to encourage the goldsmiths, he added.

The scheme has been flagged off at Ahmedabad owing to the large pocket of goldsmiths, around 1500 in the Manek Chowk-Ratan Pole area.

The bank's target is to give Rs 25 crore as loans against 15 kg gold for the next two-three months, said Kuppuswamy.