Gold loans now have respectability, competition suggests it is a growing industry: Muthoot Finance

George Alexander Muthoot, Managing Director at Muthoot Finance on Tuesday interacted with CNBC-TV18 and discussed key trends on gold loans. He said that gold loans now have respectability and competition suggests that it is a growing industry.

"Many banks are disclosing their loan portfolio," he told CNBC-TV18.

Gold loans have become very popular lately, thanks to their flexibility and security. Banks and other financial institutions in India offer gold loans, with amounts ranging from Rs 1,500 to Rs 1.5 crore. The repayment tenure of these gold loans ranges between seven days to 240 months.

On Muthoot Finance rates, Alexander said that the company had done ultra-low teaser rates that proved useful in getting customers.

"We were growing at 20 percent and now we are growing slower. We expect AUM growth in H2 to be around 10 percent. We should also see net interest margin (NIM) hovering around 11-12 percent," he said on future expectations.

He mentioned that Muthoot Finance has been classified by Reserve Bank of India (RBI) among top 60 non-banking financial companies (NBFCs) and top gold loan player.