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Thursday, 22nd December 2005 (5823 views)

Indian banks are potentially missing out on a huge untapped market in loans for gold jewellery, according to a new report.

It is estimated that over 800 tonnes of gold is bought annually in India with between 60 and 70 per cent purchased during weddings and India's many festivals.

S. Bridget Leena, author of the report, argues that Indian banks could and should offer loans for gold items.

She said: "Banks concentrate on housing loans, car loans, personal loans which account for a significant share of their retail advances and jewellery loans forms a miniscule portion of this portfolio."

Some Indian banks are offering jewellery loans, though the number is still few. These banks have partnered with retailers and see working women as making up the largest portion of the market sector.

Internationally, gold prices have risen from $420 (£241) per troy ounce to $540 (£310) per troy ounce. This has led to Indian prices reaching Rs 7,500 per 10 grams.

However, this has not been accompanied by an increase in gold jewellery purchases, which K. Shivram, vice president of the World Gold Council, blames on the lack of available loans for gold jewellery.

 

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