Muthoot Finance To Offer loans Against Gold ETF Units

Muthoot Finance Ltd which claims to be the largest gold fund NBFC in India, on Friday said it will now offer loans to Gold ETFs (Exchange Traded Funds) units as collateral.

The launch of the service, told Muthoot Finance Ltd Managing Director George Alexander Muthoot reporters here that the Loans gold ETF units in the plan, through which the Muthoot Finance is planning to venture into a whole new segment of gold in the financing, which would not only add value, but also allows the company to serve the financial needs of newer classes of customers.

The new scheme enters into force at the end of this month and allows customers to use the Fund at a rate of 15 percent interest in Gold ETF units on the extent of 85 per cent of net asset value of ETFs.

Muthoot Benchmark is also because it offers a service that is available to 30 branches across the country Muthoot first phase and will later be extended to all its 3000 branches.

He said the company hopes to expand to Rs 1,000 crore worth of loans this fiscal year.

Gold exchange traded funds have seen a progressive increase in popularity across the country over the last two or three years, achieving a whopping amount of Rs 5,000 crore in June this year, because of more than 320 000 active investors in investment according to the National Stock Exchange, Assistant Vice President and Region Head South Sunita Anand.

Benchmark Asset Management Company Pvt Ltd National Sales Head-Anil Desai, said golf ETF loan scheme Muthoot Finance Ltd. operates a source of gold exchange traded fund for investors to raise money for their investments in times of need items, instead of selling these items.

Often called paper gold, gold ETFs are investment funds to asset management companies set aside 99.5 percent of the natural purity of gold in the registered manager, SEB.

Gold ETFs are listed and traded on stock exchanges and can be bought and sold like stocks in real time.

These funds are passively managed and mirrored gold's price. By allowing investors to invest in gold without physically holding it in the form of gold exchange traded fund offers a very unique investment opportunity for investors.