Lockdown was initially imposed due to the widespread of a deadly virus, COVID-19. It was needed at the moment to save the beings from getting infected by the virus. Various precautionary measures were taken and are still being applied by people around the globe. The situations have changed drastically in the past few months. People have become accustomed to the new-normal where every step that is taken by them has to be taken along with the precautions, as explained by the state. The global economy is still suffering from the devastating aftermath of this lockdown, which led to salary cuts, lay-offs, and slowing down of business organizations (all forms of businesses such as small, medium, and large scales). Amidst this chaos, the government at all levels decided to relax the terms and conditions of the credit facilities extended by the financial institutions (banks and non-banking financial companies.
The lockdown was needed to prevent the nation from a massive loss of lives. As the world moved on, the lockdown was gradually lifted with strict regulations regarding movement and conducting business. The businesses and offices resumed their operations, but to date, they have not recovered from the losses incurred during the phase of lockdown. To tide over the cash crunch faced by individuals and entities, the lending institutions (Banks and non-banking financial companies) have provided the facility gold loan via an online platform where the borrowers don't even need to visit the lender and enjoy the benefits and funds from this facility at their doorstep. For instance, Bank of Baroda gold loan policy can be applied through the web.
A gold loan is a secured loan granted against gold as collateral. Most of the Indians have gold in one or other forms kept safely but idle at their home or in a bank locker, making it even easier to have access to readily available funds without worrying about the credential that may have gotten affected during the lockdown.
The loan amount sanctioned was usually at a loan-to-value ratio of around 75%, but this limit increased. The Reserve Bank of India, in the recent notifications, allowed the financial institutions to push the limits for this ratio to 90%, considering the current scenario and the sudden surge in demand for gold loans. These credit facilities are in demand because of their low gold loan interest rate and associated nominal cost.
Gold loans may be the last resort for people, but it has proven to be one of the most convenient facilities that keep the comfort of the borrowing individual or entities as a high priority. The borrowers don't have to knock at many doors for credit assistance when the gold loan can be available within 45 minutes of approval and without any lengthy procedure. People can avail of this facility at any point in time. Where people struggle to stay above water, the gold loan can save them from drowning in the pool of expenses and debts.
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