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In the first half of 2020, personal loans extended by banks against gold jewellery stood at Rs 1.9 lakh crore, which grew to 3.54 lakh crore in the first half of 2021.
The trend of relatively well-off people buying gold comes at a time when poorer Indian households continue to pawn their meagre gold for funds.
Newspapers are filled with ads of gold jewellery auction amid indications of economic distress faced by Indian households. But resurgence in gold prices could stem the auctions.
In India, with nearly every household owning gold jewellery in some quantity, gold loans are a preferred option at a time of widespread unemployment and loss of income.
Borrowers of loans up to Rs 2 crore will receive the interest-on-interest credit for the 1 March-31 August period today, in accordance with the Supreme Court order.
Gold’s glitter was beginning to blind Indian authorities. But this week’s volatility in prices may deter bankers from giving risky gold loans.
Immunity boosters, comfort foods and digital services are some of the items Indian consumers have been buying in the lockdown months.