Have Gold ETF!! Now get Gold loan from Muthoot Finance against it

July 15, 2011   ·   0 Comments

Muthoot Finance Ltd, which claims to be the largest gold finance NBFC in India, today said it will now offer loans against Gold ETF (Exchange Traded Funds) units as security.  Launching the service, Muthoot Finance Ltd Managing Director George Alexander Muthoot told reporters here that loans against gold ETF units was a scheme through which Muthoot Finance plans to venture into a totally new segment of gold financing, which would not only add value, but also enable the company to service the financial requirements of newer customer segments.

www.stockssavvy.comThe new scheme would come into force by this month end and would enable the customers to avail finance at the rate of 15 per cent interest against their Gold ETF units to the extent of 85 per cent of the Net Asset Value of ETFs.  Muthoot has tied up with Benchmark,for offering the service, which would be available at 30 branches of Muthoot all over the country in the first phase and would be later extended to all 3,000 of its branches.

He said the company expects to extend up to Rs 1,000 crore worth of loans this fiscal.  Gold ETFs have seen a progressive rise in popularity throughout the country over the past two to three years, attaining a whopping size of over Rs 5,000 crore as of June this year, resulting out of active investments from over 320,000 investors, according to National Stock Exchange Assistant Vice-President and Southern Region Head Sunita Anand.

Benchmark Asset Management Company Pvt Ltd National Head-Sales Anil Desai said the golf ETF loan scheme by Muthoot Finance Ltd would act as a source for investors in gold ETFs to raise funds against their investment units during times of need, instead of selling those units.  Commonly referred as ‘paper gold’, gold ETFs are mutual fund units issued by asset management companies against 99.5 per cent purity physical gold deposited with a SEBI-registered custodian.

Gold ETFs are listed and traded on stock exchanges and can be bought and sold like stocks on a real time basis.  These funds are passively managed and mirror domestic gold prices. By enabling investors to invest in gold without holding it in physical form, gold ETFs offer a rather unique investment opportunity to investors.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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