SBH launches gold purchase loan

State Bank of Hyderabad (SBH) on Thursday launched a loan product for purchase of gold and gold ornaments that carries 13 per cent rate of interest and a general cap of Rs 15 lakh.

Under this, a customer pays 25 per cent of the jewellery price upfront to the shop while the rest is credited to the jeweller's account by SBH. The customer will be able to take the ornament home only after repaying the loan for up to a maximum of 60 monthly installments.

SBH has already entered into MoUs with 15 jewellery chains, including Khazana and Kalyan Jewellers, to jointly offer this loan product.

 

“There is a great demand for this product and we expect good response for our offering,” said M Bhagavantha Rao, managing director of SBH, after formally announcing the launch of gold purchase loan product.

The bank is aiming to tap 10 per cent of the sales from the jewellery shops, which it has tied up with. It targets to provide Rs 100 crore gold purchase loans by June this year. The loan product is available across its branches in AP, Karnataka and Marathwada and also comes at a 1 per cent discount in interest as a limited period offer.