The product was tailor made for the rural customers and this was an important step in the bank's mission to provide 'Viable Finance' to the underpriviliged who do not have access to credit lines offered by organised finance channels, Biju Pillai, Senior Executive Vice President and Business Head told reporters here.
In the first in the industry, the product will offer a loan amount of up to 140 per cent of gold's valuation, he said. In the coming 6 months, the bank would take the product to 1300 branches in over 950 locations across the country. A majority of the expanison would take place in semi urban and rural regions.
The objective is to cater to 5 lakh potential rural and underprivileged customers in 10,000 villages, aiming to meet their credit needs and help them move into mainstream banking, he said.
HDFC was expecting to add one lakh women customers next year by providing them differential rate of interest. Pillai said according to stimated the Indian households have privately held gold stocks of 18000 tonne.
However, until now, the major share of this was either lying idle or being pawned to moneylenders at exhorbitant rates. Dhiraj Relli, Branch Banking Head, South 2 said the product would be made available in all parts of rural kerala.
The bank has a board approved plan to bring 10 million failise into the banking fold in five years through its 'Viable Finance' initiative.
As part of this the bank has held over 400 Grameen Loan melas in the hinterland in the last two years extending credit in the form of two wheeler loans, Commercial Vehicle financing, Gold Loan etc.
According to World Gold council India consumes 800 MT of gold, and is the largest consumer of gold accounting for over 20 per cent of gold consumption.