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New Delhi: Banks are looking to put in place standardised rules so that heirs of those who have taken gold loans can repay the debt and reclaim family jewellery in the event of the borrower's death..
Current practices vary in such situations and often give rise to various legal challenges, which meant the lender would auction off the pledged gold, they said.. . Legal Issues..
"Earlier this month, in a meeting, this issue was discussed, and there was a consensus that authorisation letters can be sought from borrowers," said one of the executives. "Banks will also explore a standardised format to avoid legal hassles."..
A recent report by rating agency Crisil noted that banks have sharpened their focus on non-agricultural gold loans for personal use, particularly in the Rs 3 lakh and above bracket, over the past three years...
"The market share of gold-loan NBFCs (non-banking finance companies) has been resilient at over 60% between March 2021 to September 2023, despite strong competition from banks," it had said, adding that banks have focused on borrowers seeking bigger loans and competitive interest rates..
