India has pledged 10 per cent of the total gold stock of 18,000 tonnes, according to the latest ImaCS Industry report. Of the 1,800 tonnes pledged gold, 75 per cent is with the unorganised market, which comprises of moneylenders and pawnbrokers and the balance 25 per cent with the organised players like specialised NBFCs, other NBFCs, commercial and cooperative banks.

1. India has pledged 1,800 tonnes of gold
India has pledged 10 per cent of the total gold stock of 18,000 tonnes,
according to the latest ImaCS Industry report.
Of the 1,800 tonnes pledged gold, 75 per cent is with the unorganised
market, which comprises of moneylenders and pawnbrokers and the
balance 25 per cent with the organised players like specialised NBFCs,
other NBFCs, commercial and cooperative banks.
In rural India, which has a low level of financial inclusion and poor
availability of financial products, gold is the biggest investment tool. Rural
India is estimated to hold around 65 per cent of the total gold stocks.
Tapping this opportunity, organised players in the gold loan market have
been growing at robust pace. The organised gold loan market in India
stood at Rs 35,000 –40,000 crore at the end of FY10, growing at 40 per cent
CAGR.
This market is estimated to have crossed Rs 55,000 crore by end of FY11
as specialised NBFCs Muthoot Finance and Manappuram combine have
grown their book by over Rs 13,000 crore during the year. Share of the
organised pie has been increasing rapidly due to significantly lower rate of
interest charged, higher loan to book value offered and perceived safety of
the ornaments. With penetration still negligible at one to 1.5 per cent, the
organised market is expected to continue to witness strong growth.
Further, the sustained marketing efforts of specialised NBFCs have been
diminishing the stigma attached to pledging gold jewellery and altering the
perception of gold loans from an ‘option of the last resort’ to an ‘option of
convenience’, the report said
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