IndusInd Bank, a private sector lender is planning to enter into the gold loans business in this quarter. It has decided to set a conservative loan-to-value (LTV) ratio of 50-65% depending on the client profile. Thus if a customer pledges gold worth Rs 10,000 then he will get Rs 5000-6500, while it can be for any end-use, that is either consumption or productive.
The bank is planning to target the metros for now and largely it will be looking at self-employed people as customers. It will be introducing loan against gold product at select branches as it involves high operational costs due to the high value of the asset involved in the segment.
