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Raising cash through paper gold

Loan against gold ETFs is a cheaper form of borrowing, but it may take longer to be sanctioned. With gold prices on the rise, financial institutions are trying different ways to attract the customer. In the past month, India Infoline, Religare Securities and Reliance Commercial Finance have started lending against ‘paper gold’, more popularly known as gold exchange-traded funds (ETFs). The process is similar to borrowing against shares, as the units are in a demat form. However, the units have to be transferred to the lender. If one compares this form of borrowing with others, ...