Many ways to participate in Many ways to participate in wealth creation via goldwealth creation via gold

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Both gold investment plans and gold Both gold investment plans and gold financing schemes are becoming popular financing schemes are becoming popular ways of buying the yellow metal. More and ways of buying the yellow metal. More and more jewellers, financial institutions and more jewellers, financial institutions and banks are coming up with schemes to help banks are coming up with schemes to help investors buy gold without making the full investors buy gold without making the full payment.payment.

Financing options:Financing options: Titan’s mass-market Titan’s mass-market jewellery brand, GoldPlus, has systematic jewellery brand, GoldPlus, has systematic investment plans (SIPs) for two gold investment plans (SIPs) for two gold schemes in addition to an equated schemes in addition to an equated monthly instalment (EMI) financing monthly instalment (EMI) financing scheme.scheme.

Palani Kumar, general manager, jewellery Palani Kumar, general manager, jewellery division, Titan Industries GoldPlus, says division, Titan Industries GoldPlus, says these schemes account for 15 per cent of these schemes account for 15 per cent of the Rs 550 crore total sales of the the Rs 550 crore total sales of the company. The schemes also are recording company. The schemes also are recording 20 per cent year-on-year increase in the 20 per cent year-on-year increase in the number of customers opting for the number of customers opting for the schemes, he adds.schemes, he adds.

Several jewellers, including Titan’s Several jewellers, including Titan’s premium jewellery brand, Tanishq, have premium jewellery brand, Tanishq, have the scheme. Tanishq has a 12-month fixed the scheme. Tanishq has a 12-month fixed monthly instalment plan and an 18-month monthly instalment plan and an 18-month flexible plan.flexible plan.

For the fixed instalment scheme, Prince For the fixed instalment scheme, Prince Jewellery credits physical gold into the Jewellery credits physical gold into the customer’s account each month on the customer’s account each month on the date of payment. This reduces the risk of date of payment. This reduces the risk of gold price escalating by the end of the gold price escalating by the end of the scheme tenure. The bonus awarded by scheme tenure. The bonus awarded by the jeweller varies as per the terms of the jeweller varies as per the terms of investment.investment.

More than 70 per cent of customers of More than 70 per cent of customers of GoldPlus investment plans are women. GoldPlus investment plans are women. “Customers with fixed income generally “Customers with fixed income generally prefer fixed instalment plans, whereas, the prefer fixed instalment plans, whereas, the other scheme is popular with the business other scheme is popular with the business class,” says Kumar. GoldPlus also has a class,” says Kumar. GoldPlus also has a tie- up with India Post for remittance of tie- up with India Post for remittance of instalments for the fixed investment plan.instalments for the fixed investment plan.

Bank tie-ups:Bank tie-ups: Most banks now have tie- Most banks now have tie-ups with jewellers to provide gold finance, ups with jewellers to provide gold finance, which can be repaid as EMIs.which can be repaid as EMIs.

“In such financing schemes, the customer “In such financing schemes, the customer pays 15 to 20 per cent of the money pays 15 to 20 per cent of the money upfront and the rest is paid by the bank. upfront and the rest is paid by the bank. The customer can then pay the loan back The customer can then pay the loan back to the bank as EMI,” says Jose.to the bank as EMI,” says Jose.

Bank of India’s Star Mahila Gold Loan Bank of India’s Star Mahila Gold Loan Scheme offers loans for jewellery Scheme offers loans for jewellery purchase for both working and non-purchase for both working and non-working women at an interest rate of 13.75 working women at an interest rate of 13.75 per cent. Indian Bank, Corporation Bank per cent. Indian Bank, Corporation Bank and Canara Bank have specially designed and Canara Bank have specially designed schemes for purchase of gold ornaments. schemes for purchase of gold ornaments.

The lenders offer these loans primarily to The lenders offer these loans primarily to employed women aged between 18 and employed women aged between 18 and 58 years. Canara Bank has a scheme 58 years. Canara Bank has a scheme called Can Mahila, where women called Can Mahila, where women between18-55 years of age can avail between18-55 years of age can avail loans for personal expenses, including loans for personal expenses, including purchase of gold ornaments.purchase of gold ornaments.

The interest rate varies between 10-10.75 per The interest rate varies between 10-10.75 per cent and there is a service charge. However, the cent and there is a service charge. However, the loan requires a co-obligation from husbands, loan requires a co-obligation from husbands, sons or parents.sons or parents.

In addition to jewellery, one can also buy In addition to jewellery, one can also buy gold coins and bars from the bank on an gold coins and bars from the bank on an EMI scheme. Corporation Bank has a EMI scheme. Corporation Bank has a scheme called Corp Mitra Gold, which is scheme called Corp Mitra Gold, which is specifically designed for purchase of gold specifically designed for purchase of gold coins and bars from the bank’s gold coins and bars from the bank’s gold outlets. outlets.

Another reason is that though prices may Another reason is that though prices may decline globally, the weakening rupee will decline globally, the weakening rupee will keep them high in India. Says Thomas J keep them high in India. Says Thomas J Muthoot, MD, Muthoot Fincorp: "The Muthoot, MD, Muthoot Fincorp: "The global gold prices have slid almost 7% in global gold prices have slid almost 7% in the past month, but the falling rupee has the past month, but the falling rupee has contained the fall to 2.5% in India."contained the fall to 2.5% in India."

Only Life Insurance Corporation of India Only Life Insurance Corporation of India (LIC) agents are eligible for this loan, (LIC) agents are eligible for this loan, which has a limit ofwhich has a limit of

Rs 1,00,000 and an interest rate of 13.25 Rs 1,00,000 and an interest rate of 13.25 per cent.per cent.

NBFCs:NBFCs: Non-banking financial companies Non-banking financial companies (NBFCs) too have similar schemes. (NBFCs) too have similar schemes. Muthoot Fincorp’s Swarnavarsham is an Muthoot Fincorp’s Swarnavarsham is an investment scheme to purchase gold in investment scheme to purchase gold in small quantities by paying a nominal small quantities by paying a nominal margin. The remaining amount could be margin. The remaining amount could be paid monthly or daily as equated paid monthly or daily as equated instalments.instalments.

Muthoot Finance has tied up with Muthoot Finance has tied up with GoldPlus to provide customers loans for GoldPlus to provide customers loans for buying gold jewellery. However, in this buying gold jewellery. However, in this scheme, the purchased jewellery will scheme, the purchased jewellery will remain as security with the NBFC till the remain as security with the NBFC till the instalments are paid off. Such loans help instalments are paid off. Such loans help plan purchases for a wedding well ahead plan purchases for a wedding well ahead of time and avoid bank locker charges.of time and avoid bank locker charges.

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