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How well are you acquainted with current affairs? Have you been keeping a tab on what’s trending in finance? New laws, new schemes, new announcements on financial matters - let’s keep you abreast with what’s happening in the vast Indian field of finance. Read our latest articles and be enlighterdtfhyu;[prerwtuned.

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Recently, the Indian Government announced a rise or hike in fuel and <a href="https://www.mymoneykarma.com/gas/indane-gas-new-connection-Price.html" target="_blank">gas prices</a> across India. This has understandably upset people from all over the country. A hike on fuel price means that the price of essential commodities shall increase as well.

Now, you can’t bring down fuel prices, but you can control your own fuel spends, and thus bring down your own expenses. If you have a vehicle, you certainly want to know how you can slash down your own fuel costs. This is what we shall cover in this article.&nbsp;

India might be the world’s 4th biggest consumer of energy but has a low per capita energy consumption. Each year, more and more people are buying private vehicles, which leads to an overall hike in petrol and petroleum prices. Just in the year 2017-2018, there was a huge 5.31% hike in their prices. To meet increasing demand, the Indian government back then had to import more fuel than before. Did you know that 80% to 90% of the country’s income goes for the purchases of or meeting the bills of various petroleum products?

Now, all that was background information. What can you do to bring your own fuel costs down?

<h3 class="credit_i_h3">10 things you can start doing today to slash your fuel costs</h3>

<ol class="homeloan_Faqs_ul_1">
	<li>
	Shake up your driving habits: Perhaps you already know that when you drive smoothly and press on brakes gently, you lose less fuel. Likewise, you lose more fuel when you are in the habit of driving fast and slamming on brakes. Driving on wrong gears gives you this same problem.
	</li>
	<li>
	Service your car: A serviced car consumes less fuel. Generally, cars require servicing per 10000 to 15000 km once a year. Thus, if your car is well-maintained, you end up saving petrol! This even reduces your car’s getting wear and tear. 
	<img alt="If your vehicle is well-maintained, you can end up saving quite a bit on fuel." src="https://mmk-s3-cms.s3.us-west-2.amazonaws.com/1616130495143.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">
	</li>
	<li>
	Change your filters: If you periodically change your vehicle’s filters, you can be rest assured that it shall be using precious fuel more carefully. Apart from changing these regularly, you should also change these if the car has been driven over a dusty or sandy area.
	</li>
	<li>
	Don’t give it too much load: The more load your car has to carry, the more it will be compensating with an increased fuel consumption. Thus, whenever you can, don’t let it carry too much weight.
	</li>
	<li>
	Check tire pressure frequently: Did you know that a fall of tire pressure, even by a small amount, can lead your vehicle to mess up its mileage. To save on fuel, you should ensure that its tires have adequate pressure.
	</li>
	<li>
	Don’t use the AC so often: Each time you turn on your car’s AC, you end up consuming more fuel. Of course, you may need your vehicle’s AC during summer and all that, but when you do not, do consider turning it off. It’ll save a lot of fuel.
	</li>
	<li>
	&nbsp;Stop when the red light tells you to: When you’re at a traffic signal red light, you’ll see many cars still running their engines while waiting for the green signal. Don’t be like them. They’ll consume more fuel, but not you. Just turn off your car at red lights.&nbsp;
	</li>
	<li>
	Use Google Maps more often: When you don’t know the route to your destination, you end up taking more detours and ‘shortcuts’. And as usual, you exhaust more fuel than necessary. So why not use Google Maps during the journeys? It’ll take you to your destination faster and save you fuel money!
	</li>
	<li>
	Don’t travel during rush hour: Let’s face it. If you dare to travel during your car, you will be caught in several travel jams. If you can, try to travel when the traffic is light.
	</li>
	<li>
	Get a <a href="https://www.mymoneykarma.com/credit-cards/index.html/save-money-fuel-credit-card.html" target="_blank">fuel Credit Card</a>: If your main goal is to save fuel, you should absolutely get one of these! These give you free fuel. It’s true. You can use its points for free fuel.
	</li>
</ol>

Hopefully, these tips shall help you save on fuel money for a long time to come!

&nbsp;

The fuel price may keep on rising, but there are still ways you can reduce spending on it. mymoneykarma guides you on how to reduce fuel expenditure.

10 Things You Can Start Doing Today to Slash Your Fuel Costs

The Budget 2021 did not make any changes to personal tax income tax rates. This is certainly a relief and benefit to high income earners and taxpayers, who were so far worried whether they will have to deal with even more cess and surcharges related to the Covid-19.&nbsp;

Interest of PF or Provident Fund has been so far thought to be a reliable and tax-free way of income for those who are salaried. From 1st April 2021, the exemption on Provident Fund interest on contributions of employees towards the PF shall be limited as far as the said contributions are noted to be more than Rs, 250000 in average in a year.

Last year’s budget already gave a cap on non-taxable PF contributions from employers till Rs. 7.5 lakhs, and even gave the provision that interest from such contributions if exceed that amount shall be taxable. The current proposal says that interest on contributions made by employees beyond the annual average of Rs. 2.5 lakhs shall be taxable too. Thus, employees shall have to pay attention to the tax implications of PF contributions.

<img alt="Employees will now have to pay attention to the tax implications of PF contributions." src="https://mmk-s3-cms.s3.us-west-2.amazonaws.com/1616130129250.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">

Another area in which taxation implications can come up is when investments to ULIPs, or Unit Linked Insurance Policies. Right now, there is an exemption for amounts received from a life insurance policy as long as the annual premium is not more than 10% of the actual sum assured.

However, one won’t get this exemption for ULIPs issued on or later than 1st February, 2021 if the average premium amount for any year is more than Rs. 2,50,000. In these cases, the ULIPs shall be seen or treated on par of equity funds, which means their maturity proceeds shall be taxable.

However, taxpayers shall be relieved to know that there are benefits when buying a residential property in those cases in which the agreement value depends on stamp duty value. To boost demand for properties, the safe harbor threshold is now 20% from the previous 10%.

Thus, if you buy a residential property, you will not have to worry about tax as long as the stamp duty value is not more than 120% of the value of agreement.&nbsp;

One should remember that:

<ol class="homeloan_Faqs_ul_1">
	<li>
	The agreement should not be more than Rs. 2 crores
	</li>
	<li>
	The transfer takes place between 12th November 2020 and 30th June 2021
	</li>
	<li>
	This transfer is from the first allotment of the residential property
	</li>
</ol>

&nbsp;

What effect does the Union Budget have on high-income individuals? Will it benefit them or be detrimental? Answers offered at mymoneykarma.

Effect of Union Budget 2021 on High-Income Individuals

The common conception is that the Budget 2021-2022 did little to change the income tax regulations. This conception, however, is wrong, although the same people can be forgiven since truly the changes in income tax have been less than the previous years. The changes forwarded in this year’s budget include higher tax deduction at source, unit-linked insurance policies, exemption of dividend payment to REITs and InvITs and pre-filled ITRs, amongst others.

In this article, we shall go through these changes.&nbsp;

<ol class="homeloan_Faqs_ul_1">
	<li>
	Income tax filing for senior citizens, that is those above 75 years of age, is no longer a requirement. The Finance Minister said that people above 75 year of age whose source of income is only interest and pension are from now onwards exempted from filing their ITR, or income tax returns. They still have to pay their tax though, but there is no longer the need to file ITR. Note that this shall be the case only if the interest earned is from the same bank where one has pension deposited.
	</li>
	<li>
	Some banks shall be notified by the central government in regards to senior citizen account holders being eligible for the above exemption. Such holders shall have to give a declaration to the concerned bank. The banks shall then compute income of senior citizens after taking into account deductions allowable under Chapter VI-A as well as allowable rebates under 87A.&nbsp;
	</li>
	<li>
	ITR Forms shall from now on have pre-filled information of interest, dividend and capital gains so that individual taxpayers have more ease. Details of capital gains shall be given, such as dividend income, listed securities, post office, and interest from banks, and etc. Also included shall be tax payments, salary income, TDS and others.&nbsp;
	</li>
	<li>
	Interest of employees’ share of EPF contribution on or later than 1st April 2021 shall be taxable, but only if it is more than Rs. 2.5 lakhs in a year. This shall result in more liability, even more so for High Net Worth Individuals who make higher contributions and don’t favor voluntary provident fund contributions. Apart from this, tax on employer’s aggregate contributions of more than Rs. 7.5 lakhs to NPS, EPF and superannuation fund and interest can make EPF less attractive. 
	<img alt="The government has done away with dividend distribution tax to make investment more attractive." src="https://mmk-s3-cms.s3.amazonaws.com/1616130014851.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">
	</li>
	<li>
	The government has taken the decision to make dividend payments to REITs or Real Estate Investment Trusts as well as to infrastructure funds, exempt from TDS. Advance Tax liability for dividend income shall take place only after the payment or declaration of dividend since this amount cannot be estimated accurately for the payment of advance tax. The government has done away with dividend distribution tax to make investment more attractive.&nbsp;
	</li>
	<li>
	There shall be higher TDS for those who don’t file their income tax returns. There will be a new section named 206AB in the IT act. This section shall provide a higher TDS rate for ITR non-filers.&nbsp;
	</li>
	<li>
	&nbsp;ULIPS or Unit Linked Insurance Plans are now bought under the tax bracket. Right now, if one redeeming of a ULIP is tax exempted as long as the policy’s total premium payable is not more than 10%. Under the new proposal, redemption of ULIPs issued on or later than 1st February 2021 when premium payable is more than Rs. 25 lakh shall now be subjected to Capital Gains Tax, which shall be on par as equity-oriented mutual funds.
	</li>
	<li>
	There is a change regarding the LTC scheme notified. Employees shall continue to get exemptions for Leave Travel Concessions of 1/3rd of the concerned expenses or Rs. 36000, whichever is less for the period of 2018-2021. This shall be only if the expense of the purchase of goods or services which are liable to GST at the rate of 12% or more, as long as the payment is made by non-cash means, and is incurred between 12th October 2020 and 31st March, 2021. This amendment is just for the financial year of 2020-2021.
	</li>
	<li>
	The government has increased tax holidays on affordable housing. This change has extended the additional deduction of tax of Rs. 1.5 lakh on interest paid on a housing loan for buying of affordable homes by one additional year.&nbsp;
	</li>
	<li>
	Lastly, the government has reduced the time limit for filing of delayed ITR. The final date of filing a revised ITR or a late ITR voluntarily shall now be 31st December 2022.&nbsp;
	</li>
</ol>

&nbsp;

The Union Budget did not bring about much changes to the existing tax regime, but some changes were made nonetheless. What are these changes? Find out at mymoneykarma.

Income Tax Changes - Income Tax Changes in Budget 2021

Last Saturday, on 2 May 2020, RBI Governor, Sakhti kanta Das had a meeting with the heads of various banks. Together they reviewed the current economic situation and the implementation of various measures that are being announced to reduce the financial stress on the Indian economy.

The meeting took place in two separate sessions. At the meeting there were managing directors and CEOs of the biggest banks of the country, both public and private.&nbsp;

One of the biggest points discussed was the current economic state and the financial sector’s stability.

Topics discussed also include credit flows to the various industry sectors, such as liquidity to NBFCs, housing finance companies, microfinance institutions, mutual funds etc, and credit flows after the pandemic. After the pandemic, special focus will be on credit flows to MSMEs, and providing them with working capital.

Items reviews included the implementation of the moratorium and the repayment of loan installments, as announced by the RBI earlier.

It needs to be said there here that earlier this week the Supreme Court of India directed the Reserve Bank to ensure the implementation of the moratorium facility by banks around the country. This is to ensure that all borrowers are being benefited by the facility.

It was discussed that it is essential to monitor the overseas branches of banks around the world.

Several steps were announced by the RBI to diminish the pressure faced by lenders, borrows and others. The RBI promises to take even more initiatives as required in the future to decrease the economic pressure on the economy and on the people in general. It understands that the greatest pressure is on the consumers and the common man.

The RBI has already taken several steps to ensure this.

<ol class="homeloan_Faqs_ul_1">
	<li>
	It has introduced a sum total of funds worth 3.2% of the GDP into the economy since February to meet the liquidity problem, ever since February 2020.
	</li>
	<li>
	&nbsp;The central bank encouraged banks to continue lending by cutting the key policy rate by 75 basis points till it reached an 11-year low of 4.4%. Additionally, the reverse repurchase rate was slashed as well, which is a tool used for controlling the money supply. It was slashed to 3.75% and is done to encourage banks to use the surplus funds for lending.
	</li>
	<li>
	The reverse repo rate was slashed to discourage banks from hoarding cash with the RBI itself and to use them for lending instead.
	</li>
</ol>

That the Indian economy seems to be headed for a quarterly contraction, which is rare, during the April-June period due to the halt of many economic activities, was discussed as well.

Earlier, the government of India provided a total of Rs. 1.7 lakh crore package of free cash doles and foodgrains for the poor, who are most at risk during this time.

The RBI Governor convened a meeting with heads of top banks to discuss credit flow after the lockdown has been lifted. Find out details at mymoneykarma.

Credit Flow And Moratorium | RBI Discusses With Banks Post-Lockdown 

Gold price is rising right now, and investors are looking to use this opportunity to invest in gold. And right now, with the government’s Sovereign Gold Bond Schemes, investing in this widely-loved yellow metal is easier and more convenient.

Right now, the Sovereign Gold Bond Scheme of 2020-2021 is open for investor subscription.&nbsp;Subscription for Sovereign Gold Bonds 2020-21 was opened from March 1, and will close on March 5. The Bonds are denominated in gram(s) of gold with 1 gram as the basic unit. Issue price for the bonds has been fixed at ₹4,662/gram.

The RBI has announced a discount of ₹50/gram for those applying online and making payment through digital mode - hence pricing it for them at ₹4,612/gram.

The RBI has placed the price of SGB at a rate that varies from tranche to tranche.&nbsp;On its part, the government generally gives a discount&nbsp;for those investors who are applying online. You need to pay digitally against this particular publication. When investing in SGBs through banks, you can make investments through their respective netbanking and mobile banking facilities.

Here are a few things which you need to know before investing in Sovereign Gold Bonds:

<ol class="homeloan_Faqs_ul_1">
	<li>
	It is mandatory to provide your PAN number, as per RBI guidelines
	</li>
	<li>
	You have to invest in a minimum of 1 gram gold, while the maximum limit is 4 kg for individuals. For trusts and similar bodies, the upper limit is 20kgs of gold during each fiscal year. The annual ceiling is inclusive of bonds subscribed under various tranches during the initial Government Issue as well as those bought from the Secondary Market.
	</li>
	<li>
	The total tenor of the SGB shall be 8 years. There is an exit option from between 5th and 6th of the 7th year. However, it should be remembered that bonds shall be ready for stock exchanges within 2 weeks of RBI’s issuance date.
	</li>
	<li>
	In case of joint holders, the limit of investment shall be 4 kg of gold, and this shall be applicable to the first applicant only.
	</li>
	<li>
	Before a new issue, RBI will say what the issue price of the bond is. This shall be decided on the basis of the average closing price of gold of 999 purity as published by the RBI for the last three days of the week before the subscription period.
	</li>
	<li>
	These gold bonds shall be issued as Government of India stocks. All investors shall get a holding Certificate. These bonds can be converted into their Demat form.
	</li>
	<li>
	Most banks like ICICI and SBI will accept subscriptions. Investors shall get compensation in the form of a fixed 2.5% per year, payable twice a year on the nominal value.
	</li>
	<li>
	Gold bonds can be used as loan collaterals. The loan to value ratio shall be set on par to the ordinary gold loan as mandated by the RBI.
	</li>
	<li>
	On redemption of the Sovereign Gold Bonds, the capital gains tax for individuals is exempted. Indexation benefits shall be given in case of long-term capital gains by an individual on bonds transfer.
	</li>
</ol>

You can find out more in detail at the <a href="https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50488" target="_blank">RBI Press Release</a>.

Sovereign Gold bonds are a great investment option. But there are still things you need to know before investing in them. mymoneykarma brings you the details.

Sovereign Gold Bonds (SGB) | Things To Know Before Investing

You are excited to start your own business, and you have a revolutionary idea that could change the world. You have done thorough research on the concept, and it's all set to be implemented except for a single problem - you don't know where to get business funding for your startup. The painstaking yet exciting journey from the inception of the idea to building a revenue-generating business needs a fuel named 'capital.' Startup funding is a significant hiccup faced by many young entrepreneurs in the country, and most business ideas fizzle out owing to a lack of funds.

There are many funding options in India to finance your startup. mymoneykarma brings you eight ways to fund your new business. You can go through them and adopt one that would suit your business the best.&nbsp;

<h3 class="credit_i_h3">Bootstrap Your Business</h3>

Bootstrapping or self-funding is an age-old practice of getting your business started. Often, first-time entrepreneurs face difficulties in getting investors on-board as no one wants to take risks with first-timers. If you are a new entrepreneur, bootstrapping might be an excellent option to get your business started. There are fewer formalities involved, and you are much more invested in your startup. You should note that you can bootstrap your business only if the capital requirement is less at the beginning.

<h3 class="credit_i_h3">Choose Crowdfunding</h3>

Crowdfunding is another way of funding a startup that is gaining traction these days. It gathers contributions from the common public on open platforms. An entrepreneur has to put up a detailed description of his business on a crowdfunding platform and mention the goals of the startup and plans for making a profit, along with the funding amount required and reasons behind the requirement. With this approach, people can contribute money toward helping a business that they believe in. Crowdfunding can also generate interest in the venture, and hence it helps in marketing the product alongside financing. Remember that crowdfunding is a competitive place to earn funding. Therefore, if your business proposal is not rock solid, you may not find crowdfunding to work for you in the end.

<h3 class="credit_i_h3">Get Angel Investors For Your Startup</h3>

Angel investors are individuals or organizations with surplus cash and are keen to invest in promising startups. They often work in groups or networks so that they can collectively screen the proposals before investing. Apart from capital, they can also offer you mentoring or advice . Some of the most famous angel investors are Alibaba and Google. Angel investors invest in your company in exchange for equity. Indian Angel Network, Mumbai Angels, and Hyderabad Angels are a few of the famous angel investment groups in India that are known to fund many Indian startups.

<h3 class="credit_i_h3">Venture Capital For Your Business</h3>

Venture capitals are professionally managed funds invested in startups that are deemed to have tremendous potential. Venture capitalists (VCs) invest in your startup against equity and exit when there is an IPO or an acquisition. VCs provide expertise and mentorship apart from evaluating your business from a sustainability and feasibility point of view. A venture capital investment is appropriate for bigger startups that are beyond the startup phase and are already generating revenue. However, VCs are known to be impatient to recover their investment within a three-five year time period. If you have a product that can take longer to get going in the market, then it may be difficult for you to convince a venture-capital investor to fund your startup.

<h3 class="credit_i_h3">Get Your Funding From Business Incubators &amp; Accelerators</h3>

You can also consider incubator and accelerator programs as your funding options. Incubators help provide initial assistance in the form of office space, financial backup, and mentorship programs. Accelerators offer similar support to more prominent startups to help them start revenue generation.

These programs typically run for 4-8 months and require commitment from you as a business owner. You will be able to connect with investors, mentors, and other fellow startups using such platforms.

<h3 class="credit_i_h3">Raise Funds By Winning Contests</h3>

You can participate in several contests organized by several industrial organizations to promote new entrepreneurial talent. In such contests, you either have to build a product idea or prepare a business plan. These competitions can get you media coverage and marketing exposure. Some of the popular contests in India are NASSCOM 10000 startups, Microsoft BizSpark, Conquest, Next BIG Idea Contest, and LetsIgnite.

<h3 class="credit_i_h3">Raise Money Through Bank Loans</h3>

Almost every bank in India offers finance for your startup through various programs. Leading Indian banks such as Bank Of Baroda, HDFC, ICICI, and Axis bank offer different options of collateral-free business loans. Moreover, personal loans can also aid you in setting up your business. You&nbsp; can bank upon the financial expertise of mymoneykarma, where we not only take care of your loan application and disbursal but also guarantee affordable interest rates.

<h3 class="credit_i_h3">Opt For Govt Programs that Offer Startup Capital</h3>

You can also opt to register as a startup in the various schemes started by the Government of India. The Indian government had launched Rs 10,000 crores worth of Startup Fund in the Union Budget of 2014-15 to improve the startup ecosystem in India. To boost innovative products and companies, the government has launched the 'Bank Of Ideas and Innovations' program. Also, different states have come up with various programs, such as the Kerala State Self Entrepreneur Development Mission (KSSEDM), Maharashtra Centre for Entrepreneurship Development, and Rajasthan Startup Fest, to encourage innovative startups. If you meet the eligibility criteria, government grants could be one of the best funding options for your startup. You need to be aware of the various government initiatives to utilise them prudently.

<h2 class="credit_i_h2">To Sum Up</h2>

If you want your startup to grow fast, you probably need external sources of capital. If you bootstrap your enterprise but end up remaining without external funding for too long, your finances may fizzle out before your product or service takes off. While the plethora of funding options available may make it easier than ever for you to get started, it's also essential to invest in good accounting software and keep your finances in order.

Startup funding in India requires a lot of capital, which is difficult to arrange and procure during the initial stages. mymoneykarma tells you all that you need to know.

Startup Funding India - Crowdfunding For Startups In India

ICICI Bank is a prominent private sector bank in India by consolidated assets. In 2017, the bank had announced a new home loan scheme, which provides borrowers with the benefit of 1% cashback on every EMI paid during the entire loan period. It is a unique offering in the finance industry by ICICI Bank and can be availed for the <a href="https://www.mymoneykarma.com/home-loan.html" target="_blank">home loans</a> with a minimum tenure of 15 years.

<h2 class="credit_i_h2">What is ICICI Cashback Scheme?</h2>

The new home loan scheme enables borrowers to choose their preferred mode for cashback, unlike <a href="https://www.mymoneykarma.com/credit-cards/index.html/top-cash-back-credit-cards.html" target="_blank">cashback credit cards</a>. Either the borrowers can utilize the cashback to prepay the loan by getting a reduction in the principal outstanding of the entire <a href="https://www.mymoneykarma.com/icici-bank/home-loan.html" target="_blank">ICICI home loan</a>, or they can receive the credit in their ICICI Bank account.

Both the Indian residents and the NRI borrowers are eligible to apply for the cash back option in a home loan. This scheme is applicable only to the customers who are making the loan repayment through ICICI Bank accounts.

<h3 class="credit_i_h3">Highlights of 1% Cashback Scheme</h3>

<ol class="homeloan_Faqs_ul_1">
	<li>
	It provides the customers with a benefit of 1% cashback on every EMI.
	</li>
	<li>
	It is available for new home loans to resident and NRI customers.
	</li>
	<li>
	The cashback benefit starts from the first Home Loan EMI. However, the first the cashback amount is credited upon the completion of 3 years loan period. After that, the cashback amount is credited subsequently every 12 months until the maturity of the loan period. The cashback offer is available for all the <a href="https://www.mymoneykarma.com/loans/secured-and-unsecured-loans.html" target="_blank">mortgage loans</a>.
	</li>
	<li>
	For NRI customers, the cashback amount can be adjusted as a pre-payment into their loan account only. In this case, the cashback amount cannot be credited in the bank account.
	</li>
	<li>
	It can be availed for completed as well as under construction properties.
	</li>
	<li>
	This scheme is applicable to a minimum loan tenure of 15 years and can be extended to 30 years.
	</li>
</ol>

<img alt="ICICI Bank New Home Loan Cashback Scheme of one percentage" src="../../images/new/personal-finance/icici-bank-new-home-loan-cashback-scheme.png" class="img-responsive credit_i_img"> 
The critical aspects of the new home loan scheme are:

<ol class="homeloan_Faqs_ul_1">
	<li>Loan Amount: It can be any amount as per the standard home loan offering of ICICI Bank.</li>
	<li>Eligibility: Both resident and NRI customers are eligible to apply for this scheme.</li>
</ol>

<h3 class="credit_i_h3">Overview of ICICI Bank &amp; Services</h3>

ICICI Bank offers services to its large customer base with a multi-channel delivery network across 4852 branches, 13780 ATMs, phone banking, internet banking, and the country's first digital bank on mobile called

'PocketsbyICICIBank'. ICICI Bank has the most significant mortgage portfolio. Last year, it had disbursed mortgage loans of over Rs 1 trillion, becoming the first among private sector banks in India to achieve such a milestone. It also introduced few digital initiatives to make the home loan process convenient while delivering the solutions at a faster pace.

Their services comprise home loans on Tab banking, Express Home Loans offering <a href="https://www.mymoneykarma.com/credit-score/home-loan-credit-score.html?utmsrc=homeloan_enquiry" target="_blank">fully online home loan approval</a> in 8 working hours, and subsequent disbursements for under-construction projects through the mobile app.

<h3 class="credit_i_h3">Balance Transfer</h3>

The balance transfer/ <a href="https://www.mymoneykarma.com/credit-scores/index.html/how-refinancing-affect-credit-score.html" target="_blank">refinancing&nbsp;facility</a> is available for mortgage products, such as loans against property, lease-rental discounting, and top-ups on current mortgage loans. However, the customers who have an existing housing loan from other banks or NBFCs can go for a balance transfer facility to transfer from a high-interest loan account to a lower one.

The rate of interest for the balance transfer facility is less, and along with that, the new 1% cashback scheme reduces the loan burden to an extent. So, taking this step can be a boon for the customers.

<h2 class="credit_i_h2">Conclusion</h2>

With the growing fierce competition among the lending institutions and the digitalization in the loan process, many banks are coming up with various profitable schemes to assist customers in <a href="https://www.mymoneykarma.com/buying-a-home/index.html/arrange-down-payment-for-buying-new-home.html" target="_blank">buying their dream home</a>.

mymoneykarma offers great <a href="https://www.mymoneykarma.com/credit-score/home-loan-credit-score.html?utmsrc=homeloan_enquiry" target="_blank">home loan offers</a> as well. there are several benefits to applying for a loan throuh us. Apart from the fact that interest rates are the lowest, the application is smooth and seamless.

Due to such convenient schemes, in today's world, one can easily think of owning a home <a href="https://www.mymoneykarma.com/buying-a-home/index.html/getting-mortgage-in-20s.html" target="_blank">even at a young age</a>.

&nbsp;

Do you know what is ICICI Bank New Home Loan Scheme? If not, here are the experts from mymoneykarma to guide you. Click on the link to know more.

ICICI Bank New Home Loan Cashback Scheme

In March 2020, WHO declared a state of emergency worldwide due to the Coronavirus Pandemic. This is clearly something the world had never seen, and thus was not ready for it.

Worldwide, the number of confirmed cases has crossed 8 lakh while the number of deaths has crossed 40000. In such an alarming situation, governments around the world including India have taken steps to slow and stop the spread of the virus. In India, the state governments have been instructed to do likewise.

One of the steps the government has asked people to take is to avoid public gatherings, and to work from home. Some companies were forced to shut down and allow ‘work from home’ because some of their employees were found Positive with the virus. Other companies followed suit, clambering to take new measures in this emergency situation. Right now, most jobs apart from the absolutely necessary ones are to be done from home.

All of this is certainly alarming. One of the fears that people are having now is about their state of finances. What if their salaries get halved? What if there are no incentives, bonuses or even yearly increments? What if the company shuts down?

<h2 class="credit_i_h2">Worried about your finances during Covid-19 lockdown? Here are 5 things to help!</h2>

To ease your fears, mymoneykarma brings to you some personal finance tips to aid you in these uncertain times.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Get an insurance cover: The government is doing its best to provide healthcare to affected patients. While the number of affected cases may now seem like small, no one can say what the future will bring. It may happen there won’t be enough medical facilities for the rising tide of patients. To prepare for such a time, it is more prudent to take an insurance cover. This shall ensure your hospitalization at medical facilities that are otherwise very expensive. In such cases, there is no need to worry about funds. 
	<img alt="health insurance : Emergency Health Care Services" src="https://mmk-s3-cms.s3.amazonaws.com/1587983957695.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">
	</li>
	<li>
	Get a high data limit broadband or internet package: Most people are working from home. Are you? Well, if you are, you may want to consider having this. It ensures that your work is seamless without any data breaks. This can be spent not just on work, but also for family entertainment.
	</li>
	<li>
	Do online transactions: Going outside is strictly prohibited, unless it is absolutely necessary. As such, there is very less need to do hand-to-hand transactions. Perhaps you are already making transactions online. If not, consider that when you need to buy something. Stay safe, and buy from home.
	</li>
	<li>
	Subscribe to study and entertainment packages: Nowadays, there are many of these like Amazon Prime, Hotstar, Netflix and more. Education channels include Udemy, Khan Academy, and more. This quarantine can be a great way to level up your skills.
	</li>
	<li>
	Buy health items: One more thing to do is to stock up on health items including sanitizer, masks, handwash, and others. This shall keep your immunity strong and help to keep the virus away. Besides that, have home-cooked food. Have plenty of green vegetables, dairy products and other nutritious items.
	</li>
</ol>

&nbsp;We hope that these tips shall help you during these tough times.

Personal Finances, During covid19 especially, have to be protected at all costs. Let mymoneykarma help you navigate the financial roads during the Covid crisis.

Covid 19 : How to Protect Your Personal Finances

Desperate times call for desperate measures. The coronavirus or Covid-19, a pandemic that broke out in China, has now spread out to almost all countries of the world. India is afflicted with this as well.

<h2 class="credit_i_h2">The Great EMI Relief</h2>

Thankfully , a&nbsp;moratorium of three months of EMIs on all outstanding loans has been announced.

<img alt="Governor of the Reserve Bank of India, Mr. Shaktikanta Das" src="https://mmk-s3-cms.s3.amazonaws.com/1585314434250.jpeg" style="height:375px; width:667px" class="img-responsive credit_i_img">

The statement says: "All commercial, regional, rural, NBFCs and small finance banks are being permitted to allow a 3-month moratorium on payment of instalments in respect of all term loan EMIs outstanding on March 31."

<img alt="RBI 3 months moratorium on EMIs" src="https://mmk-s3-cms.s3.amazonaws.com/1587983413634.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">

For the next three months, no EMI will be deducted from the account of anyone who has a loan outstanding. And all this without any hit on credit score. EMIs will resume after the moratorium period gets over.

This is going to be a huge relief for all EMI payers, especially for those — such as the self-employed — whose income had become uncertain in the wake of the lockdown.

The 3-month moratorium will apply to corporate loans, <a href="https://www.mymoneykarma.com/home-loan.html" target="_blank">home loans</a>, and <a href="https://www.mymoneykarma.com/personal-finance/i/how-to-pay-off-your-car-loan-faster.html" target="_blank">car loans</a>. <a href="https://www.mymoneykarma.com/credit-score/personal-loan-credit-score.html?utmsrc=personalloan_enquiry" target="_blank">Personal loans</a> will also qualify for this.

However, even the moratorium period offered by RBI has come under question as of late. Moody's opines that the loan moratorium could cause a greater build-up of credit loss for banks. India and China have both extended such measures to deal with the liquidity crunch amid the COVID-19 crisis. Although this can provide temporary relief to borrowers, it will constrain banks from taking proactive recovery actions and could lead to an even greater build-up of credit loss once the moratoriums are lifted, reports Moody's.

Moody's, in a report on the Asia-Pacific region on Tuesday, said that while policy stimulus will shore up credit quality for larger companies in sectors including airline and oil and gas, Asia's banking sector profitability would decline from falling asset quality and lower net interest margins.

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3 Months Moratorium - RBI has decided to waive off EMIs for all loans for 3 months, in the wake of covid19. Find out more at mymoneykarma. 

RBI 's 3 Month Moratorium

Even as we speak, personal finance is being transformed by technology. The days of going to the bank to withdraw money or update your passbook, or worrying about your security online, are gone. There are many apps now, for instance, which makes it possible for you to carry out all the functions of a bank customer without going to the bank!

There are technologies that take good care of your online data, keeping it safe and secure from data theft. As we said before, the latest technologies are making it possible to have high levels of personalization, fantastic customer experiences, and guarding the integrity of financial data.

And the best thing? These technologies are not hard to operate or master. These are quite user-friendly. Field of personal finance, customers want apps with which they can get maximum results with minimal interaction. In other words, the technologies they need have to make effortless interaction, have to be easy to use, have a low learning curve if at all, secure and fruitful. In other words, customers expect financial service firms to understand their requirements, and do their best to fulfill these without asking them.

At the very heart of developing satisfactory customer experiences, data security and personalization, technologies like machine learning, AI and blockchain are at the forefront.

Here is how these technologies are changing how personal finance works.

<h2 class="credit_i_h2">Banks use Chatbots and DVAs</h2>

DVAs stand for Digital voice Assistants. DVAs and chatbots are quickly changing how customers interact with institutions in the personal finance industry.&nbsp;

For instance, imagine you are a bank customer. You lose your ATM card belonging to the bank. In a state of panic, you call the bank’s help number and the DVA helps you through the process of blocking the card.&nbsp;

Or imagine that you are interested in knowing about the services of a particular company. You visit their website and even before checking out the Service page, you are greeted by a Chatbot. After a few questions and answers, you now know how the company can help you.

Chatbots and AI-powered DVAs have grown quite sophisticated, so much so that many are not able to differentiate between responses provided by people and those given by DVA. DVAs even respond to you verbally like a real person.

Whenever you visit a financial institution’s website, you are greeted by a chatbot. After just a few simple questions, you have your questions answered and queries resolved. While chatbots are effective most of the time, yet they still are not able to replace human staff completely.

DVAs are a newer development. Unlike the chatbots that interact by text, DVAs interact verbally.

Customer service experience is becoming smoother gradually, with technologies like AI. These facilitate easy interaction with banks and customers.

DVAs are still not able to access individual photos, offer personalized services based on your needs, or perform transactions like trades. This is due to security concerns. However, it is hoped that in the future, when technology becomes more secure, DVA shall become more reliable.

<h2 class="credit_i_h2">Data makes personalization possible</h2>

Data is strong enough to propel the global economy. Every single decision is taken based on data. It is the key to understanding customers, and to provide a more personalized experience. All types of companies, and even banks, have access to customer data. Where do these data come from? These come from demographic information, website analytics, online purchase records, and more. With machine learning, companies develop easy-to-understand customer profiles.

For instance, financial institutions are using machine learning to learn about their customers. This technology is smart enough to recommend products to customers based on their preferences. These are also smart enough to offer products at prices at which customers are most likely to buy them.

In the future, personalization can reach a level in which technology can negotiate price with customers like a human.

<h2 class="credit_i_h2">Blockchain</h2>

Blockchain is used by financial institutions to make secure transactions. The most widely-recognized blockchain technology is the one that powers Bitcoin.

Blockchain allows sellers to sell items with the knowledge that payment is received. It keeps track of all transactions in a secure environment or “ledger”. The number of copies of a ledger is in thousands, which makes it virtually impossible for the information to be stolen.

<h3 class="credit_i_h3">Blockchain benefits customers globally</h3>

This technology is used to transfer funds around the world. Imagine hundreds of billions of US dollars sent exchanged across the world. Traditionally, such transactions were expensive and convoluted. Blockchain makes it simple and less costly.&nbsp;

Merchants use the technology to benefit a lot. They no longer need to fear that a customer will bounce a cheque. Customers already are already able to track the ownership of a product. Blockchain may also act as an escrow account by releasing products after receipt of payment.

As you can see, these technologies mentioned above are giving rise to a new era, an era when personalization in financial services is the norm. Over the next few decades, their use shall expand. Customers shall be serviced with a high degree of accuracy. Risk will be eliminated greatly as well.

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Technology is changing all spheres of our life, and personal finances are no different. mymoneykarma helps you learn the latest technological advances in personal finances.

How Technology is Changing the Personal Finance Market

The World Bank has announced that it has already cleared a sum total of $1 billion specifically for the assistance of social protection in India. It is still in talks with the Indian government. This money will be used for the benefit, protection and growth for MSMEs (micro, small and medium enterprises).

The country director of the World Bank, Mr. Junaid Ahmad, has not elaborated on the size of this loan to Indian MSMEs. According to the country director for India, he said that the terms are being finalized. However, Mr. Junaid compliments the government’s efforts till now to revive the economy, an economy which much like every other country reeling from the shock of the Covid19 lockdown.&nbsp; He commends the government’s effort to aid the country’s healthcare, economic stabilization and Social Protection.

Mr. Junaid has commented, “India’s assistance is the largest among emerging markets. The government has been very practical in coming in phases. It needs to keep the powder dry, and come in later, if needed.”

The support of the World Bank for Social Protection is planned to be funded in two phases. The first allocation shall be of $750 million before the end of June 2020, and the final amount of $250 million shall be given by June 2021.

The funds of the first phase are to support the Indian government’s Pradhan Mantri Garib Kalyan Yojana. This is so as to develop and push up the public distribution system, and for the direct benefit transfer other than supporting any other initiatives like Social Protection for frontline workers who are fighting against the virus in the healthcare and support sectors.

The public distribution system is crucial at a time like this. For instance, there is an urgent need to pay attention and even update the distribution system. For instance, migrant workers are stuck in cities around the country, without work or food, or even without shelter. Apart from them, there are also numerous other publics who require help, both in urban and non-urban areas.&nbsp;

He also says, “This $1 billion will help the government’s large support. It is the government of India which is leading with expenditure, we are just following. Other development partners will also come behind this program.”

The assistance is majorly focused on helping the urban poor, most of who are in dire straits right now due to no availability of work, shelter, and food. Migrants are at high risk too. These are those who have left their native homes to work in cities in unskilled jobs, such as laborers and construction crews. Due to the lockdown, they are trapped in the cities with no job, food and shelter.

Such people need help desperately, and this loan from the World Bank will certainly be welcome. The World Bank shall work with the central and state governments to bring help to these publics.

The help is meant to tackle issues faced by migrants and urban poor, and to deal with portability of benefits.&nbsp;

One of the ways to do this shall be to develop an urban Social Protection platform, by the use of Aadhar, This shall aid the release of social benefits and cash transfers. It is expected that this shall help in portability of benefits.

Additionally, there shall be an integrated platform for social protection. It may not link all of the 460 transfers, but it will rework business processes and targeting. This shall help beneficiaries, as they do not need to apply multiple times for various social transfer programs.&nbsp;

To conclude, from the $1 billion dollar commitment from the World Bank, $550 million will be financed by credit from the Bank’s International Development Association. $200 million shall be a loan from the International Bank for reconstruction and Development. The loan will have a maturity of 18½ years with a grace period of 5 years.

&nbsp;

World Bank has decided to provide 1 billion dollars as social protection aid to India, in the wake of the covid pandemic. Find out more details at mymoneykarma.

World Bank Provides $1 Billion Loans To India As Social Protection Aid

For us Indians, gold will always remain a secure investment that keeps our minds at peace when any other mode of investment or income seems to fail us. The recent fall in gold prices has created great interest among investors to stock up on this asset. Some may even wait for further fall. There are even experts predicting an end to the bull run that gold prices have enjoyed so far.

With gold prices sharing such mixed market signals,&nbsp; it has to be said that now could be the best time to <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">avail a loan against gold</a>. It is generally seen that getting a gold loan fares way better than getting the other alternative to it - personal loan. Sceptical? Well, Let’s see how a loan against gold works better than a personal loan, taking into consideration all their pros and cons.

Paperwork for personal loans is not very elaborate, as long as basic eligibility parameters are met and KYC documents are furnished. While it is true that there are few financial products that can match the&nbsp; versatility and flexibility of&nbsp; personal loans, the emergence of secured gold loans bodes well for the loan scape, especially under the current circumstances that warrant an unstable employment scene.&nbsp;

That being said, both forms of loans have a number of pros and cons to be taken into consideration in some detail before coming to a verdict on which one might be better. Read on to learn more on how the gold loan product differs from a personal loan, with all their drawbacks and advantages accounted for.

<h2 class="credit_i_h2">Personal Loans</h2>

A personal loan is unsecured, which means that it does not need you to pledge any asset/property (business or personal) in order to get the amount. One can get a personal loan and utilise it for a number of personal or professional requirements - to fund a wedding, getting household appliances, tackling a medical emergency, funding children’s higher education, consolidating past debts, or even going on a trip abroad!

The eligibility criteria, which is often what makes or makes or breaks the deal in case of personal loans,&nbsp; incorporates numerous factors. This can include a good credit history (generally with a <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=loans_2251" target="_blank">credit score</a> of 700 or higher), the applicant’s age and employment status, regular monthly income, etc.

In further detail, let’s take a look for pros and cons of what a personal loan brings to the table:

<h3 class="credit_i_h3">The Pros of Personal Loans</h3>

- Collateral Free: If someone wants to take out a personal loan, they wouldn't have to lay down any of their personal or business assets as collateral. This makes personal loans more accessible to those who have no security to offer, but do have a regular source of income.

- Versatile: The scope of personal loans is really helpful to borrowers, as it can be used for any kind of fiscal need at an individual level. This can include consolidating past debts, paying for weddings or other big-ticket expenditure, and more.

- Simple documentation: The paperwork for availing a personal loan is quite easy, needing you to furnish your KYC documents and meet basic eligibility parameters.

- Funds Quickly Disbursed : Funds are approved and disbursal quite quickly, with many lenders crediting the amount to your account within 24-48 hours.

<h3 class="credit_i_h3">The Cons of Personal Loans</h3>

- Strict prerequisites (credit score and credit history): Since personal loans are not secured by collateral, banks need to be thoroughly assured of the borrower’s repayment capacity before approving a loan. For this reason, banks undertake stringent perusal of your credit management history&nbsp; and present credit score to deduce your financial capability.

- Higher interest rates: As they are unsecured, lenders assess personal loans to be riskier options as against loans with security. So, personal loans draw comparatively higher rates of interest.

- Processing Fees: Since personal loans are provided without collateral security, banks are required to invest in scrutinising your income and credit history. Hence, they will charge you an additional processing fee, which can be upto 1% of the loan amount.

<h2 class="credit_i_h2">Gold Loans</h2>

When kept safely within a locker, idle gold jewelry assets don’t get you any returns. Sanctioned based on the value of the gold article, Gold loans are a great way to utilize such valuable idle items in times of real need.

Gold loans are secured, which leads to lenders offering relatively lower rates of interest. The idea of such loans is on the basis of pledging your gold to provide security for the loan amount.

<h3 class="credit_i_h3">The Pros of Gold Loans</h3>

- Quick processing: Lenders generally verify only the necessary documents before they sanction a gold loan. So the approval process is made less tedious, and the amount can be disbursed to your account within just a few hours, in most cases.

- No credit history check: Your credit score does not greatly impact the approval of your gold loan. Nevertheless, it is best to check your credit score from a credit agency and take action to repair it, if necessary, especially if your score is below 500.

- Lower interest rates: As a secured loan, gold loans normally draw lower interest rates as opposed to personal loans, while offering the same level of versatility in use.&nbsp;

- No prepayment fees: Unlike personal loans, the borrowers do not have to pay an additional fee for foreclosure of gold loans. This offers great flexibility in terms of how the borrower decides to <a href="https://www.mymoneykarma.com/loans/repay-gold-loans-in-2020.html" target="_blank">repay the loan</a> - either in installment or in bulk.

<h3 class="credit_i_h3">The Cons of Gold Loans</h3>

- Retention of a high margin by the lender: A lender normally sanctions gold loans for more or less 75% of the total value of the gold article. This means that the remaining 25% is a margin kept by the lender.

- Collateral: It goes without saying that you have to pledge the gold article as security to get a gold loan. This implies that the lender keeps the right to ownership of the asset and even to sell it in order to recover dues, if you are to fail repayment of the debt in full.

- Short tenures: Mostly, gold loans are allowed for a tenure that goes up to a maximum of 3 years. Given that the loan amount might be higher, a tenure this short can really increase the EMIs (monthly installments) towards the loan. Therefore, proper financial planning beforehand, is needed in such a situation.

<h3 class="credit_i_h3">Which should you choose?</h3>

The discretion of whether to choose a personal loan or a gold loan is completely dependent on your financial capabilities and needs as a borrower. If you want to get&nbsp; better flexibility of repayment, have a poor credit score, need a large loan amount immediately, and you are comfortable with repaying it in the span of a short tenure of around 3 years, it may be in your best interest to choose a gold loan. On the other hand, borrowers with a great credit score and a regular source of income that can sustain a more drawn-out repayment tenure, a personal loan could very well be the better option.

Gold loans can, in fact,&nbsp; serve as a great alternative to personal loans. You could use a gold loan in many ways. It could help you pay off liabilities like credit card outstanding immediately, without accumulating further interest. You could fund medical emergencies using an instant gold loan. A gold loan could also help pay for other important and unprecedented expenses in your life.

The best part, perhaps, is that if you run a business, then you could get an overdraft facility loan against any gold ornaments you have in your possession. This helps meet working capital needs as and when they arise. You end up paying a simple interest only for the sum used for the given number of days. The overdraft facility against gold can even be looked at as a very worthy alternative to creating an emergency fund.

While a salaried employee could find it hard to set aside an amount that equals a whole year's expenditure aside, this gold loan instrument can allow him/her to get funds as and when needed. So, gold loans can be a great way to keep your finances secure and strong in a variety of circumstances. You could <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">apply for a gold loan</a> with us right away!

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Gold Loan vs Personal Loan is a dilemma in the borrower's mind, any time any time an urgent need for funds arises. Find out the best option for you, with all pros and cons, at mymoneykarma.

Gold Loan Vs Personal Loan - Which is Better?

Are you cash-strapped enough to purchase essential items right now, or the things you need? If that’s the problem, worry no more. ICICI Bank brings you the Pay Later service. Through this service, you can purchase right now anything you need, and lay later.

When you take this novel service from ICICI Bank, you no longer need to borrow from your family and friends, and certainly don’t need to have a guilty conscience! Pay Later gives you a loan with up to 45 days zero interest rate. Better yet, you don’t need to visit any bank branch right now either! Just apply online with just the click. Use this loan to pay your bills, make important payments, shop online, or whatever you need. Pay Later also makes it easier for you to pay merchants through their Unified Payments Interface or UPI instantly and easily.

<h3 class="credit_i_h3">Applying for PayLater</h3>

It is stressful to have outstanding debts or payments to make. PayLater makes your life easier by making it safe and secure. It lets you take command of your payments and lets you meet your financial obligations. It is now time to bury your worries.

You can apply for PayLater in three ways:

You can get it on <a href="https://www.icicibank.com/Personal-Banking/paylater/pockets.page?" target="_blank">Pockets</a>, on <a href="https://www.icicibank.com/Personal-Banking/paylater/imobile.page?" target="_blank">iMobile</a>, and on the <a href="https://www.icicibank.com/Personal-Banking/paylater/paylater-internet-banking.page?ITM=nli_cms_btn_paylater_index_paylaterib" target="_blank">web</a>.

Now, here are some common questions that you may be asking right now.

<h2 class="credit_i_h2">FAQ</h2>

<h3 class="credit_i_h3">What is PayLater?</h3>

PayLater is a digital product from ICICI Bank. It is similar to a credit card. You can use it to buy things and to make payments. If you pay within 45 days of taking the loan, no interest will be charged.

<h3 class="credit_i_h3">Where can you use PayLater?</h3>

ICICI Bank gives you PayLater as a new payment option for making purchases online. When buying anything online, just choose your PayLater Account on the checkout page.

<h3 class="credit_i_h3">How does it work?</h3>

When you have applied and are accepted into this program, you get 45 days to repay back the loan with zero interest. That means if you repay the sum back within this time, you don’t have to pay any interest. With PayLater, you can shop online, pay bills and pay merchants online.

<h3 class="credit_i_h3">What are its benefits?</h3>

Firstly, if you pay within 45 days of getting the loan, you don’t need to pay any interest! Secondly, when you use PayLater, you don’t need to use your Savings Account, which maintains a higher balance and gets more interest.

<h3 class="credit_i_h3">How can PayLater dues be paid?</h3>

You can repay by debiting automatically from your <a href="https://www.mymoneykarma.com/savings-account/icici-bank-savings-account.html" target="_blank">savings account at ICICI Bank</a>.

<h3 class="credit_i_h3">Can one have multiple PayLater accounts linked to various ICICI Bank products?</h3>

Unfortunately, this is not possible. You can only have one single account for all products from ICICI Bank.

<h3 class="credit_i_h3">How can one avail the PayLater Facility?&nbsp;</h3>

Right now, this facility is on an invite-only basis, and so you cannot apply to it. If you are selected, you will be greeted by a pop-up when you log into iMobile, Pockets wallet, or into your internet banking.&nbsp;

<h3 class="credit_i_h3">Are there any charges involved?</h3>

As a customer, you will be charged a penal interest based on the daily total outstanding amount after the Pay by Date. In addition, you will be charged fixed late payment charges till all dues are cleared.

<h3 class="credit_i_h3">Is there anywhere where this cannot be used?</h3>

There are indeed certain places where you cannot use PayLater, such as while making credit card payments, or while transferring to other bank accounts. It cannot be used while doing a person to person funds transfer either.

<h3 class="credit_i_h3">Is it possible to get rid of lengthy account statements by PayLater?</h3>

With Paylater, it is possible to debit your account once a month to consolidate your routine small ticket spends and expenses, and therefore, it helps you to keep you in track of your expenses on a regular basis.

In conclusion, we would like to say that the PayLater from ICICI Bank can be very handy in certain circumstances. For instance, when you need cash urgently, or when you need it for making online purchases, you can use it. Likewise, you can use it to pay urgent bills. It has zero interest for 45 days, and you can use it to make merchant payments.

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Pay Later by ICICI Bank is the latest tool in lending to customers. How is it different from loans or credit cards? Find out at mymoneykarma.

Pay Later By ICICI Bank | How To Activate Pay Later In ICICI Bank

Bank stocks prices of major banks such as the IndusInd Bank, SBI, and HDFC Bank fell by over 11% on the NSE (National Stock Exchange) yesterday on 5/4/2020. Part of the reason was due to weak investor sentiments that resulted after the RBI’s decision to close the CKP Cooperative Bank of Mumbai.

On the intra-day trade, the Nifty fell by 8.5% on the National Stock Exchange. Thus, it was also one of the top losers of the day on the stock exchange. Nifty50, in comparison, was down by 5.99% by 2;30 PM.

Banks like IndusInd and ICICI Bank both slid by 115 while Bandhan Bank went down by 10%. While Federal Bank slid down by 10.7 5, HDFC Bank went down by 8.4%. Punjab National Bank, Axis Bank, Bank of Baroda and the SBI all went down by 6.5% to 10% on the National Stock Exchange.

Meanwhile, Nifty Private Bank declined in its stock prices by 9% and the Nifty PSB index by 6.3%.&nbsp;

Apart from this, Non-Banking Financial Corporations or NBFCs seemed to be under a lot of pressure as well. NBFCs like Sriram Transport Finance, Cholamandalam Investment and Finance Company, Indiabulls Housing Finance, Bajaj Finserv and HDFC all went down by 5% to 10%.&nbsp;

Last Saturday, the license of CKP Cooperative Bank was cancelled by the RBI with effect from April 30, 2020. The reason given was that the bank’s weak financial position was hampering its day-to-day operations, and that the bank was unable to pay back its depositors due to financial instability.

&nbsp;The RBI also said that there is no revival plan right now to merge this bank with another one, because there is no credible commitment from the bank’s leadership. The bank had additionally failed to keep the minimum capital deposit with the RBI at the rate of 9% along with reserves.

RBI, however, did assure depositors that 99% of them, or more, shall be their full deposits back from Deposit Insurance and Credit Guarantee Corporation.

Apart from the resultant weak investor sentiment after this action of the RBI, banking counters saw massive selling pressure. These were naturally based on the fears of NPAs or non-performing assets increasing due to the current lockdown.

A Reuters news report says that the Indian government is expected to see bad debts double due to the effect of the pandemic. This can affect credit growth, and thus the Indian economic recovery. The economy, as you know, right now is under a lot of strain already. The economy has ground to a halt to control the spread of the pandemic.

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RBI Decision has caused stock prices of several banks to fall. Why did this happen, and how? Find out at mymoneykarma.

RBI Decision Causes Bank Stock Prices to Fall

It is no secret that the SBI, or the State Bank of India, is the largest bank in the country. However, did you know that its net worth is only one-third of the HDFC Bank? The HDFC Bank is the largest of the private sector banks in India. Now, it is also true that the balance sheet of SBI is four times as large as HDFC, has as much as 10 times as many customers, and is run and owned by the government itself. Yet, it is behind the private sector bank when it comes to net worth.

Perhaps a worse thing is that its stock price went down by more than 6% recently.

As of 4th May, SBI has a market capitalization of Rs. 1.6 lakh crore, while the HDFC Bank has a market capitalization of Rs. 5 lakh crore.

<h3 class="credit_i_h3">The problems faced by public sector banks</h3>

One of the biggest reasons for the undervaluing of SBI is that it is a public sector bank. That means that like all public sector banks, it has a social responsibility. For instance, it has to invest in projects that have a long gestation period and do not give quick profits. Moreover, the bank needs to work according to the government’s political priorities. Private sector banks, on the other hand, can choose where they can invest.

<h3 class="credit_i_h3">What it means</h3>

What it all means is that public sector banks, even one such as SBI, tend to make less profit than what they should. It is not just a matter of stocks being undervalued or overvalued.&nbsp; Investors are more concerned about getting returns on equity. Due to this, valuation is quite different, and therefore it is not about absolute quality.

<h3 class="credit_i_h3">What is Return On Equity?</h3>

ROE or Return On Equity is a measurement of a company’s financial performance. It is calculated by dividing the company’s net income by shareholders’ equity.

HDFC Bank is known as the most premium valued bank in the country. As far as its stock trades go, they are as high as 3 to 4 times of its book value. SBI’s stock trades at best have the value range of 2 times of its book value.

<h3 class="credit_i_h3">What is a book value?</h3>

Book value of a company is the difference of the total assets of a company and its total liabilities as per the balance sheet.

<h3 class="credit_i_h3">Difference is share price falls</h3>

Right now, SBI share prices are down by 46.5%. That of HDFC is down by 27.8%

<h3 class="credit_i_h3">Banking is always the first to get hit and the last one to recover</h3>

Turn to times of any economic turmoil and you’ll see that banking is always the first to be affected and the last economic sector to recover. According to experts, right now there are already credit issues. There is little to no credit in the market right now. When it comes to private banks, they shall be choosier as to where and to whom they’ll lend. Public sector banks on the other hand will have to lend either way to revive the economy. Private banks don’t face this compulsion.

ICICI Direct report estimates that stocks prices may increase by 27% to 235% over the course of one year, but still SBI is not expected to be able to surpass HDFC.

<h2 class="credit_i_h2">SBI Retirement Benefit Fund Launched</h2>

SBI Mutual Fund, India’s largest asset manager launched on Wednesday 20th January, its flagship <a href="https://www.mymoneykarma.com/buying-a-home/index.html/index.html/things-to-avoid-during-retirement.html" target="_blank">retirement benefit</a> fund. This fund is aimed at those interested in long-term investing. The plan offers 4 various investment plans. These different plans have different asset allocation strategies. The fund closes its doors on 3rd February 2021. SBI Mutual Fund has a target to gather Rs. 2000 crore.

The four different investment plans are aimed at those interested in the different investment strategies. These strategies are: aggressive, aggressive-hybrid, conservative-hybrid, and conservative. These schemes may also invest in gold exchange traded funds foreign equities, Real estate investment trusts, and infrastructure investment trusts. These plans may invest in various foreign securities as well, including ETFs up to 35% of the aggressive plan.

The fund house for this plan is targeting millennials who have varied needs. While the funds can be overseen by fund managers, the owners themselves can allocate and choose assets themselves.

&nbsp;

SBI Struggles to keep up with HDFC in banking, especially in these turbulent times. Find out more in detail at mymoneykarma.

SBI Struggles to Surpass HDFC

On Thursday, the Supreme Court directed the RBI to ensure that the three-month moratorium rule is being heeded by all banks. The 3-month loan moratorium scheme was formulated by the Reserve Bank of India on 27th March. It granted customers the choice to pay their EMIs after a 3-month grace period. This was done keeping in mind that many people are under considerable financial stress due to the pandemic and lockdown.

In the Supreme Court, the three judge bench which was headed by Justice NV Ramana heard this case with videoconferencing. The bench sought a response from Tushar Mehta, the Solicitor General, as to the state of borrowers regarding the moratorium. Are they getting the benefits which were granted by the RBI for this lockdown period?

The 3-judge bench also comprised BR Gavai and Sanjay Kishan Paul. They oversaw and disposed of several petitions that challenged the 27th March RBI circular. The petitioners were of the opinion that they were not of the aggrieved party and therefore they could not interfere.

These were disposed because the bench was of the opinion that none of the petitioners had a loan running case. The petitioners said that the plea was for the good of the public, but this was dismissed by the bench.

Per petitioner, the three month moratorium period will see the interest getting accumulated. This will continue to accumulate unless the customer starts repaying. Petitioners said that interest should not be charged during the moratorium period since people are already facing challenging situations. If customers have to pay an additional interest on top of the regular EMIs, it can be a big problem to the borrowers.

As per RBI decision, banks and NBFCs are to give a 3 month moratorium period to their term loan customers. This is to be for all term loans whose installments are due between 1st March and 31st May. Term loan is the blanket term for home loan, vehicle loan, agricultural loan, personal loan, and crop loan. RBI also said that credit card dues also come under the moratorium. The moratorium facility will be given for both principal and interest payment, and this means that the moratorium is on the EMI totally.&nbsp;

A Moratorium entails that you do not need to pay your EMIs for the time being, and there shall be no penalties charged. This is by no means a concession. It is a deferment of payments for giving relief to borrowers who face problems of liquidity.

Supreme Court has mandated that the RBI should directly oversee the implementation of the emergency moratorium. Find out more details at mymoneykarma.

Supreme Court asks RBI to Oversee Moratorium Implementation

The government of India may soon provide the much-needed financial relief package to the MSME sector of the economy. This financial stimulus had been one of the main demands from the MSMEs. It will help them overcome cash flow and liquidity problems produced due to the pandemic-induced lockdown.

<h3 class="credit_i_h3">Official Word Comes Out</h3>

Nitin Gadkari, the MSME Minister said on Sunday in an official webinar that the government may soon announce a financial relief package for the MSME sector. He is hopeful that the Prime Minister and the Finance Minister will soon act on this need in this industrial sector.

The MSME Minister said that there is a need for an ‘’integrated approach” if the pandemic crisis is to be tackled. Such an approach can then be used to leverage and find out new business ideas and new business opportunities. The Minister encourages overseas students to participate in the country’s building up of a response to the challenges presented by the Covid-19. This is possible by a combination of research, management, innovation, higher education, medicine, and more.

Right now, around 74% of small businesses, MSMEs and startups are on the verge of shutting down their doors to the public, or to scale down their business at the least. They plan to do this in the coming 6 months due to the effect of the pandemic on the economy. Among these, 47% say that they have less than a month’s worth of cash left. 24% of them say that they have one to three month’s worth of cash left while 23% say that they have three month’s worth of capital left.

<h3 class="credit_i_h3">The Solution</h3>

The MSME Minister urges small businesses to focus on entrepreneurship, innovation, technology and science. He encourages them to build on their research and experiences to convert knowledge and skills into wealth. Nitin Gadkari also suggests a cost reduction if the companies wish to remain competitive.&nbsp; The minister has said already that the MSME sector is on the verge of collapse. The money desired is only the dues pending to the sector, and is valued at around 6 lakh crore.&nbsp; A legislation is needed soon.

Financial Relief has been announced for Small Businesses by the government. Find out more details at mymoneykarma.

Financial Relief for Small Businesses Underway

On 13th May 2020, Nirmala Sitharaman, the current Finance Minister, announced a huge economic boost for the country's well being. In this respect, there has been an announcement of economic stimulus worth&nbsp;Rs. 20 Lakh Crore. This will be a Covid19 Economic Package aimed at reviving the battered and bruised Indian economy, which happened as a result of the pandemic lockdown.&nbsp;

Indeed, the lockdown has forced a major part of the economy to shut down, resulting in an unprecedented loss of funds and opportunities. This problem continues to grow acute as the novel coronavirus shows no signs of stopping. Meanwhile, some economic sectors like hospitality and tourism are badly affected. Thousands of other companies over various industry sectors are forced to shut down due to this lockdown.&nbsp;

To combat this stress on the economy, the government has been providing a generous Covid19 Economic Package. The first one was of 1.7 lakh crore. This time, seeing how the previous package has turned out not nearly adequate, there is the announcement of Rs. 20 Lakh Crore. It is also being called the Nirmala sitharaman package, by some. The package additionally combines the recent announcements of the government on supporting key sectors of the industry, along with certain measures as recommended by the RBI.

Let us now see some of the key points that were discussed by the Finance Minister, Mrs Nirmala Sitharaman:

<ol class="homeloan_Faqs_ul_1">
	<li>
	From May 14th, till March 31st of 2021, TCS/TDS (tax collected at source/tax deducted at source) has now been reduced by 25% of the current rate. This is applicable to all payments. Doing so will release around Rs. 50,000 crore into the hands of the citizens instead of giving them as taxes.
	</li>
	<li>
	Due date for all income-tax returns for the Financial Year 2019-2020 will be now extended from July 31st, 2020 and October 31st 2020 to November 30 2020, and the Tax Audit from the date of 30th September 2020 to October 31st, 2020.
	</li>
	<li>
	The government of India has also announced Rs. 3 lakh crore worth collateral-free loan for MSMEs. This shall have tenure of 4 year, at a 100% credit guarantee. Doing so shall allow 45 lakh economic MSME units to rejoin the workforce. Indirectly, it shall aid in the production of jobs around the country and safeguard existing jobs. This is certainly&nbsp; a big relief for MSMEs. 
	<img alt="" src="https://mmk-s3-cms.s3.amazonaws.com/1589448474993.jpeg" class="img-responsive credit_i_img">
	</li>
	<li>
	MSMEs, in order to revive them from the devastating effects of the pandemic lockdown, shall be provided with equity support. The government shall give them or facilitate them a provision of Rs. 20,000 crore as a subordinate debt. This is yet another big relief for MSMEs.
	</li>
	<li>
	The Covid19 Economic Package says that the government has changed the definition of MSME. This is done so that MSMEs of all sizes can benefit from the economic packages.
	</li>
	<li>
	Earlier, the investment limit of MSMEs was Rs. 25 lakhs. Now it is revised to Rs. 1 crore.
	</li>
	<li>
	Some MSMEs may need a little more help than the others. For such entities, there is a separate fund of Rs. 50,000 crore fund of funds, or FoFs, through a mother fund-daughter fund framework. This shall get such MSMEs listed on their chosen markets, and also help increase their usual capacity.
	</li>
	<li>
	According to the Covid19 Economic Package, The government of India will henceforth not be allowing global tenders in the government procurement for tenders up to Rs. 200 crore. This shall result in an India that is self-reliant, and shall also be able to give rise to the Make In India dream a reality. The Make in India is a desirable dream of the government in which the country will not just be self-reliant, but will be producing various products within the country itself from its own resources.&nbsp;
	</li>
	<li>
	As per the covid19 Stimulus Package, MSMEs shall get seamless e-market linkages across the country, when they are not able to participate in trade fairs because of the pandemic. All payments pending to the MSMEs shall be given by the government within the next 45 days.
	</li>
	<li>
	For workers and businesses, EPF support is not extended for the next three months. This is done to give a liquidity relief of Rs. 2500 crore. For those who are not covered earlier, the statutory PF contribution is not being reduced to 10% from the earlier 12%. This reduction, however, is not for the central government.
	</li>
	<li>
	It has to be noted, among many relaxations, that the time limit of the Vivad se Vishvas scheme for making payments is not extended to 31st December 2020.
	</li>
	<li>
	For NBFC/MFIs/HFCs, there is now a special liquidity scheme of Rs. 30,000 crore. This is to make investments in both primary and secondary markets, and even for buying investment-quality debt papers, and shall ease credit-flow.
	</li>
	<li>
	There shall be a one-time liquidity infusion of an amount of Rs. 90,000 crore. This is for power distribution companies only, and shall be against receivables. This will help Discoms to pay power generation companies, and shall benefit the customers as well.
	</li>
	<li>
	All refunds to charities and non-corporate businesses and professionals that are pending are to be immediately issued.
	</li>
	<li>
	Government has also announced a liquidity infusion fund of Rs. 45,000 crore through a Partial Credit Guarantee Scheme for NBFCs only. 
	<img alt="" src="https://mmk-s3-cms.s3.amazonaws.com/1589448523416.jpeg" class="img-responsive credit_i_img">
	</li>
	<li>
	According to the covid19 Stimulus Package, Contractors around the country shall be relieved to hear that all Central agencies will give an extension of up to six months. This shall be without any cost to the contractor, obligations like finishing of work covering goods and services contract and construction contracts.
	</li>
	<li>
	States and UTs shall get an advisory from the Ministry of Housing and Urban Affairs to enable the invocation of Force Majeure/ Act of God during the pandemic. This shall be applicable for all those registered real estate projects that are expiring on or after 25th March, 2020, resulting in flexible contract enforcement.
	</li>
</ol>

<h3 class="credit_i_h3">The Covid19 Economic Package – In Conclusion</h3>

This covid19 Stimulus Package is to spur economic growth and to increase demand once more. It is also to create a self-sufficient India.&nbsp;

The Prime Minister of India, Mr, Narendra Modi has put forward a comprehensive vision for the country to overcome these trying times. For instance, there are to be 5 pillars for a self-reliant India; economy, system, infrastructure, demography, and demand. The government intends to make local brands first, and then to take them to a global level. To be self-reliant, says the PM, India does not need to be an isolationist country, but will focus on developing indigenous potential limitlessly.

&nbsp;

Covid Economic Relief is the need of the hour, and the finance minister mrs. Nirmala Sitharaman has come up with a stimulus package worth 20 lakh crore. Find out more at mymoneykarma.

Nirmala Sitharaman Announces Covid Relief Package of 20 Lakh Crore

Gold loans, till mostly an unorganized industry sector, may be uniquely positioned to capitalize on demands for loans in the post-Covid period. This is especially true for both individuals as well as for small business clients. A strong digital footprint and an expanded branch network may be just what’s needed to capture this sizable market segment.

Right now, the pandemic is creating a problem in the availability of loan funds. This is happening because the banks themselves are in a bad shape. Thus, they are keen to give money under a stringent and strict policy, to only those customers who are most likely to pay back loans. Banks may have considerable liquidity, but they are not willing to lend out, except to credit card owners. Because of all this, it is harder to get personal loans right now. Lenders are now looking beyond credit scores. For individuals and small businesses strapped for cash, this has created a unique problem. However, in such a situation, the savior can be a <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">gold loan</a>.

<h3 class="credit_i_h3">The Economics of Gold Loan in India</h3>

According to a KPMG report in January, the Indian organized gold loan market is estimated to be valued at around Rs. 467,200 crore. Approximately, this is 35% of the gold loan market with commercial banks. Small finance banks, Fintech companies and NBFCs are now the key players in the market. The unorganized gold loan sector is thrice as large.

Right now, there are a couple of big opportunities for the gold loan players in the organized market. Firstly, they have a big opportunity to bring unorganized money lenders under the organized market. This will ensure a tighter RBI regulation and a low rate of interest. Secondly, from out of the 22,000 tons of gold which Indian households have right now, only 5% are pledged as deposits of gold loans.&nbsp;

<h3 class="credit_i_h3">Now is the time to make the best effort</h3>

From all the rest, Muthoot Finance has been the preferred <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">gold loan</a> company for a long time. Compared to many NBFCs, its gold-lending business is de-risked.

<h3 class="credit_i_h3">How can gold loans rise to the challenge post COVID?</h3>

Muthoot Finance company’s chairman, George Alexander Muthoot, admits that after the pandemic, the market scenario can give a big opportunity for gold loan companies in the country. Here is how it can happen.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Small businesses will be in need of working capital. Since banks are reluctant to provide new risk for themselves, the role is taken by gold loan companies.
	</li>
	<li>
	Because of the lockdown, payments are delayed to traders, small businesses and shopkeepers. They require finance in the meantime till regular cash starts flowing again. Gold loan can be the better credit choice here.
	</li>
	<li>
	Both Mannappuran and Muthoot Finance are expecting a huge surge in demand for gold loans from retail customers as well. Many families are facing job loss and income reduction. For them, gold loan is the credit choice that is least risky.
	</li>
	<li>
	Gold loans also have the Loan to Value advantage. Companies offering this service are giving 75% LTV.&nbsp;
	</li>
</ol>

For both small businesses and individuals, gold loans may be positioned uniquely to capitalize on the post-COVID demand for credit. A strong digital footprint and an expanded branch network may be able to capture this nascent market.

<h2 class="credit_i_h2">Which banks give you the best rates for gold loans?</h2>

When you are faced with an emergency situation or in a circumstance when you are in dire need of money, you need to get funds as soon as possible. Such circumstances may include medical emergencies, a job loss, etc. You may also need money for not-so emergency circumstances such as your child’s wedding expenses and so on.

Now, here’s the thing: very few of us have an emergency fund strong enough or savings big enough to cover all the things which life decides to throw at us. For all these things, most of us have to rely on loans. The best thing to do in such situations is to take a personal loan. Of course, you can use your investments in financial instruments, but we’d rather you don’t use the latter. If you can, leave those untouched. That is for your retirement. It is therefore far better to take a personal loan.

Amongst personal loans, gold loan is by far the best option as long as you have sufficient gold. This is also one of the safest options for getting credit. At the end of the day, you are not pledging anything big like your home or properties. You are pledging your gold, which is still valuable and has a sentimental value, but even in the far off chance that you can’t repay it, you still can go on normally in life.&nbsp;

One of the best things about a gold loan is that it gives a lower rate of interest when compared to other personal loans.

<h3 class="credit_i_h3">Where can you get gold loans?</h3>

Both banks and NBFCs give you gold loans. Banks include SBI, HDFC, HSBC and others while NBFCs include Manappuram Finance and Muthoot Finance.&nbsp;

<h3 class="credit_i_h3">How much loan can you expect in a gold loan?</h3>

The amount you can get for a gold loan varies from one lender to another. This is especially true in case of NBFCs. To get a lower interest rate, you’ll have to shop around a bit. Take your time and browse through what the various lenders are offering. And by the way, don’t just look at the interest rate when picking a gold loan. Pay attention to the terms and conditions, and the other features and benefits as well. Right now, ICICI Bank gives between Rs. 10000 and Rs. 1 crore in gold loans. For SBI, this is between Rs. 20000 and Rs. 20 lakh. Gold loans from Muthoot Finance have gold loans starting from Rs. 1500 without a maximum limit.

<h3 class="credit_i_h3">Gold loan tenure</h3>

Like the total amount, the tenure of a gold loan also differs from one bank to another. HDFC offers tenure ranging from 3 months and 24 months. SBI offers a maximum repayment term of 36 months.&nbsp;

Interest rate on gold loan charged by banks and NBFCs

<table class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td>
			Bank / NBFC
			</td>
			<td>
			Gold Loan Interest Rate
			</td>
			<td>
			Processing Fee
			</td>
		</tr>
		<tr>
			<td>
			SBI
			</td>
			<td>
			7.00% to 7.50%
			</td>
			<td>
			0.50% + GST
			</td>
		</tr>
		<tr>
			<td>
			Bank of India
			</td>
			<td>
			7.40%
			</td>
			<td>
			Rs.125 to Rs. 300 per lakh
			</td>
		</tr>
		<tr>
			<td>
			Canara Bank
			</td>
			<td>
			1 Year MCLR (7.65%)
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Bank of Maharashtra
			</td>
			<td>
			7.35%
			</td>
			<td>
			Rs.500/- exclusive of GST.
			</td>
		</tr>
		<tr>
			<td>
			Uco Bank
			</td>
			<td>
			8.50%
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Indian Bank
			</td>
			<td>
			8.50%
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Punjab National Bank
			</td>
			<td>
			RLLR + 1.95%
			</td>
			<td>
			0.75% of loan amount
			</td>
		</tr>
		<tr>
			<td>
			Central Bank of India
			</td>
			<td>
			MCLR + 0.50% to MCLR + 2.00%
			</td>
			<td>
			NIL
			</td>
		</tr>
		<tr>
			<td>
			Punjab &amp; Sind Bank
			</td>
			<td>
			7.50%
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Federal Bank
			</td>
			<td>
			8.50% onwards
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			United Bank
			</td>
			<td>
			1 Year MCLR (9.35%)
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Dhanlaxmi Bank
			</td>
			<td>
			Starting 9.65% (Fixed)
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			J &amp; K Bank
			</td>
			<td>
			1 Year MCLR+ 2.00% p.a
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Karur Vysya Bank
			</td>
			<td>
			10.10%
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Indusind Bank
			</td>
			<td>
			10.5% to 16%
			</td>
			<td>
			Processing Fee - 1%
			</td>
		</tr>
		<tr>
			<td>
			Kotak Mahindra Bank
			</td>
			<td>
			10.5% to 17%
			</td>
			<td>
			Upto 2%
			</td>
		</tr>
		<tr>
			<td>
			HDFC Bank
			</td>
			<td>
			9.50% to 17.55%
			</td>
			<td>
			1.50% + GST
			</td>
		</tr>
		<tr>
			<td>
			Bandhan Bank
			</td>
			<td>
			10.99% to 18.00%
			</td>
			<td>
			1% + GST
			</td>
		</tr>
		<tr>
			<td>
			ICICI Bank
			</td>
			<td>
			10% to 19.76%
			</td>
			<td>
			1% of loan amount
			</td>
		</tr>
		<tr>
			<td>
			South Indian Bank
			</td>
			<td>
			1 Year MCLR + 3.65 % o
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Muthoot Finance
			</td>
			<td>
			12% to 27%
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Axis Bank
			</td>
			<td>
			13.00%
			</td>
			<td>
			1% + GST
			</td>
		</tr>
		<tr>
			<td>
			AU Small Finance Bank
			</td>
			<td>
			Up to 24%
			</td>
			<td>
			1% of loan amount
			</td>
		</tr>
		<tr>
			<td>
			Manappuram Finance
			</td>
			<td>
			Max 29%
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			City Union Bank
			</td>
			<td>
			1 Year MCLR (14.25%)
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Union Bank
			</td>
			<td>
			MCLR+1.40% to MCLR+ 2.40%
			</td>
			<td>&nbsp;</td>
		</tr>
		<tr>
			<td>
			Bank of Baroda
			</td>
			<td>
			MCLR + Strategic Premium + 3.00%
			</td>
			<td>
			0.50% + GST
			</td>
		</tr>
		<tr>
			<td>
			Karnataka Bank
			</td>
			<td>
			As per MCLR guidelines.
			</td>
			<td>&nbsp;</td>
		</tr>
	</tbody>
</table>

&nbsp;

&nbsp;

Gold Loans are showing signs of promise in the Indian loan market righ now. Will Gold Loans be the main loan provider in future? Find out at mymoneykarma.

Economics of Gold Loan in India | Gold Loan Business Model In India

According to a KPMG report, India’s gold loan market is being expected to grow to Rs. 4617 billion by 2022. This is at a 5-year compounded annual growth rate of 13.4%.

In the 2018-2019 fiscal year, companies dealing in gold loans have aggressively expanded their branch networks around the country, especially over northern and eastern states of the country.&nbsp;

The KPMG report said, “Moving forward, these companies are expected to focus on optimizing their asset utilization and leveraging their existing branch infrastructure to maximize the brand-level AUM and customer outreach.”&nbsp;

The name of the KPMG report is “Return of gold financiers in India’s organized lending market.”

<h3 class="credit_i_h3">What Brings this Growth?</h3>

New-age fintech players NBFCs have opened up an untapped market among digitally enabled customers, the number of whom is daily increasing. All this has been possible due to the emergence of digital and online models of gold loan service. All this means that it is now easier than ever before to <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">get a gold loan</a>. For instance, a customer only has to provide minimal documentation online, and has to visit the bank just once to deposit the gold ornaments. Once this is done, the funds are credited to the customer’s account. Companies are even offering doorstep service to customers, something that was till not heard only in conjunction with more rudimentary loan types.

It is expected that industry players like banks, NBFCs and FinTech firms will be investing more to develop “digital on-boarding capacities.” Right now, such capabilities are essential for capturing this segment, as well as the attention of tech-savvy customers.

Right now, the organized gold loan market comprises many banks, Nidhi companies, Fintech companies and Non-Banking Financial Companies. All of them contribute near to 35% of the total Indian gold loan market.

According to the KPMG report, these companies are competing not just against each other, but against financial service providers as well. This means there is considerable competition in the market due to the presence of many industry players. The organized gold market is still a new industry sector. All of this spells good news to gold loan customers.

The size of the unorganized gold loan market is three times that of the organized one, but it also shows high growth potential. Currently, it is actively penetrated by big financial service players offering unsecured loans.

In the past few years, major gold loan players have achieved geographical saturation. They are not exploring niches like SME loans and microfinance to keep their companies growing.

According to <a href="https://economictimes.indiatimes.com/topic/KPMG">the report</a>, customers who previously pledged their gold to meet emergency situations, holidays and durable purchases now get a risk-free way to get funds without the need to give any collateral.&nbsp;

The report says “Lenders are partnering with Fintech companies to leverage the advancement in technology for developing enhanced underwriting capabilities that are agnostic to the availability of customer credit history.”

Lately, the use of credit card loans, personal loans and other consumer durable loans are gaining in popularity due to the arrival of robust underwriting systems and technological platforms.

<h3 class="credit_i_h3">Are there any Challenges?</h3>

The current gold market is not without its challenges. These challenges include gold price volatility, and the stress in the NBFCs. In 2019, the price of precious metals reached an all-time high. After this, gold loan companies shall be “more conservative” in their efforts to provide loans. They shall continue to give low LTV (Loan to Value) ratio, and Low Tenure Loans to offset their risks due to gold price volatility.

While gold price globally is expected to fall in the long term, the Indian gold market is expected to grow with high growth potential. This is due to the fact that banks are getting more selective in credit disbursement. The spread to new areas of the country will also aid growth.

The Gold Loan market in India is all set to see a great rise in business during these times. Why and how? Find out here at mymoneykarma.

Indian Gold Loan Market Set to Skyrocket by 2022 

You may be able to ignore the gold ornaments at home, but you can’t ignore the hue and cry over gold loans these days. This is partly due to soaring prices, and partly due to increased consumerism, along with evolving social norms. <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">Gold loans</a> are seeing not just unprecedented rise right now, but are stated to increase in popularity in the future as well.

<h3 class="credit_i_h3">Is the Gold Loan Market Growing?</h3>

Think about this: The organized gold loan market in India was worth 25,000 crore in FY 2009. It grew at a compound rate of 38% between FY 2002 and 2009. Today, it is expected to grow at a compound rate of 40%. It is stated to reach a market value of 50,000 crore. According to a study by the ICRA Management Consulting Services, a study shows the alarming situation of pawn brokers. Big players like NBFCs, new Fintech companies and others are coming into the market, making the work of small players very difficult. However, there are other reasons as well.

Firstly, it is all about convenience. Sometimes, when customers pledge their gold for loans, it is because of desperation due to some situation. However, it is still are step more convenient than other personal loans. One can get gold loans today faster.

Secondly, gold loans are known for being offered with a low interest rate. While it is currently increasing certainly due to increasing demand, it is still less than unsecured personal loans. Gold loan interest rates are from 10% to 24% per year while other personal loans have interest rates of 16% to 26%. Remember that interest rate depends on your credit profile.

After all this, we’d like to say that it is far better to take a gold loan than a personal loan because of lower interest rates. Gold loans are secured loans. An additional reason to take this is that most NBFCs and banks will allow you to pay interest on a monthly basis, while the principal can be paid at the end of the loan period. From the perspective of interest, this arrangement works much better.

At the same time, you can determine the amount of loan based on the market value of your gold items. This means you do not need to show any income proof, unlike personal loans in which the loan is determined after the scrutiny of your income. You’ll need a lot of income proof to get a personal loan. Not so in case of gold loans, since income is not so important here. What is important is that you submit your gold with the bank. That is all that’s needed. And then, you pay back the loan to redeem your gold. Banks like HDFC and ICICI may ask for your personal details such as ID, and this verification process takes an hour. Others like Manappuram and Muthoot sanction your gold loan in a few minutes.

<h3 class="credit_i_h3">Is it Better to Get a Gold Loan Now?</h3>

Instead of hoarding your gold at home in a locker, why not put it to good use? You don’t have to wait for an emergency to use them either. Have a business to finance, or an education to fund? Want to go for a dream vacation? Your gold can be used for anything. After all, these are personal loans. Financial institutions give you up to 70% to 80% of the value of your gold.&nbsp;

Unlike the past, pledging your gold is not longer seen as taboo. That is why right now, gold is seen as a convenient and legitimate way of meeting any emergency, or to get quick funds for anything. Right now, <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">gold loans</a> are taken by people from all walks of life seeking to meet urgent situations, or for bettering their lot. Others choose this because gold loans are easier to get than other types of personal loans. Right now, gold prices are soaring, and banks themselves are pushing customers towards gold loans.

That being said, you should not take a gold loan wantonly without thinking. After all, a loss of gold is still a serious and irredeemable loss. It’ll look bad if you lose your family heirloom, right? If you fail to pay the loan back on time, banks can charge a higher interest, and auction off your gold. Thus, before taking such a credit, you should still weigh the pros and cons. There are risks, and you should be aware of them.

&nbsp;

Are Gold Loans a safe alternative to personal loans. What are the risks involved with Gold loans? Find out in detail at mymoneykarma.

How Safe Are Gold Loans in 2021? | How To Get A Gold Loan Now

The government of India introduced sovereign gold bonds in 2015 under the Gold Monetization Scheme.&nbsp; Gold bonds, under this scheme, are issued each month, as they have been from October 2019 to March 2020. As per this scheme, the gold bond issues are in tranches, and are sanctioned by the RBI after due consultation with the Indian Government.

Right now, the Sovereign Gold Bond Scheme of 2020-2021 is open for investor subscription.&nbsp;Subscription for Sovereign Gold Bonds 2020-21 was opened from March 1, and will close on March 5. The Bonds are denominated in gram(s) of gold with 1 gram as the basic unit. Issue price for the bonds has been fixed at ₹4,662/gram.

The RBI has announced a discount of ₹50/gram for those applying online and making payment through digital mode - hence pricing it for them at ₹4,612/gram.&nbsp;The interest for these is generally 2.5% per annum, and one is able to pay this semi-annually on the gold bond’s nominal value.

The bond’s tenure is generally 8 years, but these do come with an exit option which is available in the 5th, 6th and 7th years on the interest payment dates.&nbsp; The maximum gold limits which one can subscribe to is 4 kg. This is 4 kg for a Hindu undivided family and 20 kg for similar other family unit entities. Co-owned gold bonds have a limit of 4 kg for just the first applicant.

<h3 class="credit_i_h3">Why should you invest in Gold Bonds?</h3>

There are many benefits in owning a gold bond. Before going to the benefits though, you need to know that gold bonds right now are restricted to residents of India. Further, these customers need to be from Hindu Undivided Families, Universities, Trusts and charitable institutions.

Now, without further ado, here are the benefits,

<ol class="homeloan_Faqs_ul_1">
	<li>
	Bonds can be used as collateral for a <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">Loan against Gold</a>
	</li>
	<li>
	One can make payments for the bonds with cash till Rs. 20,000. Alternatively, one can make a demand draft of the same amount, as well as by cheque and e-banking.
	</li>
	<li>
	Gold bonds can be converted to DEMAT form.
	</li>
	<li>
	These are securities that are issued by the government in the form of government stock.
	</li>
	<li>
	Gold bonds are not subject to tax.
	</li>
</ol>

<h3 class="credit_i_h3">How do you invest in gold bonds?</h3>

As we said before, gold bonds are issued by the Reserve Bank of India after consulting with the government of India. These are issued in tranches.

Some banks like the SBI offer gold bonds. These are not the same as gold loans. These are gold bonds that you invest in. To invest in them, you have to fill out an application form that these banks provide you. These forms are available at designated post offices. However, you can also download the form at the RBI website. You can even apply for bonds online at the websites of SBI and Kotak Mahindra.

To apply, you need to provide things like your PAN card number. Without the PAN number, you cannot apply.

Gold bonds are sold through the offices of Scheduled Private Banks, Nationalized Banks, Designated post offices, and from Stock Holding Corporation of India.

However, not everyone can apply and be accepted to invest in Gold Bonds. There is an eligibility criterion that needs to be followed. That means even if you do apply, it does not give you a guarantee to get a gold bond. As said before, you can of course apply for them on the websites of listed commercial banks.&nbsp;

<h3 class="credit_i_h3">Eligibility criteria for Sovereign Gold Bonds</h3>

People must be:

<ol class="homeloan_Faqs_ul_1">
	<li>
	Indian resident: Sovereign gold loan schemes from SBI, and other banks, can only be had if you are an Indian resident.
	</li>
	<li>
	Individuals and groups: Eligible parties also include individuals, trusts, associations, HUFs, and others as long as they are Indian citizens. Individuals and entities can also jointly invest in gold bonds with other members who are eligible.
	</li>
	<li>
	Minors: Gold bonds can be purchased for minors by parents and guardians.
	</li>
</ol>

<h3 class="credit_i_h3">SBI Gold Schemes</h3>

SBI or the State Bank of India has a number of gold investment schemes for gold purchase, investments and loans. You can buy gold coins from the authorized SBI branches, and even invest in sovereign gold bonds and in the bank’s mutual fund schemes. These have systematic transfer and investment plan options. Where there is a sudden financial need, you can pledge these gold bonds and as securities to <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">get a loan</a>.

SBI Sovereign Gold Bond eligibility

<ol class="homeloan_Faqs_ul_1">
	<li>
	Joint investors and individuals who are above 21 years of age
	</li>
	<li>
	Bonds have to be issued through SBI
	</li>
	<li>
	The customer needs to have a DEMAT account with SSL.
	</li>
</ol>

SBI Sovereign Gold Bond required documents

Firstly, go through this form. You’ll have to fill it up to apply. The needed documents are:

<ol class="homeloan_Faqs_ul_1">
	<li>
	Last monthly salary slip showing deductions of self and co-applicant
	</li>
	<li>
	Form 16 from employer of self and co-applicant
	</li>
	<li>
	Copy of income tax returns of the last 2 years, duly acknowledged, by ITO with computation of income, and for applicant and others too
	</li>
	<li>
	Copy of Voter ID or passport or Driving License for ID proof
	</li>
	<li>
	Copy of Telephone bill, electricity bill, passport or voter’s ID for address proof
	</li>
	<li>
	Latest passport sized photo of self and co-applicant
	</li>
	<li>
	Last 6 months bank statement showing salary credit for both self and co-applicant
	</li>
	<li>
	Proof of official address if applicant is an employee
	</li>
</ol>

<h3 class="credit_i_h3">SBI Sovereign Gold Bonds - Other things to know about</h3>

There are certain forms that are used for specific purposes. You can get these at the SBI branch from where you are applying.

<ol class="homeloan_Faqs_ul_1">
	<li>
	For the application- Form A
	</li>
	<li>
	For acknowledgement of receipt- Form B
	</li>
	<li>
	For holding certificate- Form C
	</li>
	<li>
	For Cancellation of nominee- Form E
	</li>
	<li>
	For transfers- Form&nbsp; F
	</li>
</ol>

&nbsp;

SBI Sovereign Gold Bonds are a great investment investment. mymoneykarma brings you all you need to know about sovereign gold bonds.

SBI Sovereign Gold Bonds - Eligibility for Sovereign Gold Bonds

Gold enjoys a prestigious place in the hearts and minds of Indians all around the country, and even abroad where they live. Gold items are seen as the representation of social status, financial security, and cultural legacy. It is also traditionally seen as a liquid asset and is widely accepted as a security in lieu of money due to its value and purity. It is therefore no surprise that India is one of the largest consumers of gold in the whole world.

Between 2018 and 2019, India alone accounted for 23% of the global gold demand. In India, gold holdings are concentrated in rural areas, which accounts for two-thirds of the demand for this commodity.

<h3 class="credit_i_h3">Price movements of gold</h3>

Since the last 5 decades, <a href="https://www.mymoneykarma.com/gold-rate-india.html" target="_blank">gold prices</a> in the country have been showing healthy growth. Around 2003, gold prices saw what is known as an inflection point, and prices rose to levels never seen before. After 2013en years later, gold prices saw a rapid rise once more, after which the price fell due to global price fall after 2015. After this point however, there was a price surge once more. The last three years are showing healthy growth once more.

<h3 class="credit_i_h3">The gold loan market</h3>

In India, people have an emotional bond with their gold items such as gold jewelry. Thus, these are rarely sold off, except to meet emergency and immediate financial needs. Instead, they give their gold items as collateral in return for short-term loans. This happens a lot in rural areas where farmers take short term loans by keeping their gold items as collateral. Broadly, gold loan lenders are classified into:

<ol class="homeloan_Faqs_ul_1">
	<li>
	Formal or organized sector
	</li>
	<li>
	Informal or unorganized sector
	</li>
</ol>

<h3 class="credit_i_h3">Gold loan customer segments</h3>

<table cellspacing="0" class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td style="background-color:#bfbfbf; height:0pt; vertical-align:top">
			Number of households (total 293 million)
			</td>
			<td style="background-color:#bfbfbf; height:0pt; vertical-align:top">
			Credit Consumption categories
			</td>
			<td style="background-color:#bfbfbf; height:0pt; vertical-align:top">
			Primary providers
			</td>
		</tr>
		<tr>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			High – 8 million and 3% of market
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Housing loan, Auto loan, CD loan, Personal Loan
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Banks, NBFCs
			</td>
		</tr>
		<tr>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Upper-mid – 61 million – 21% of market
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Housing loan, Auto loan, CD loan, Personal Loan, Gold loan,
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Banks, NBFCs
			</td>
		</tr>
		<tr>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Lower mid – 97 million – 33%&nbsp;
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Housing loan, Auto loan, CD loan, Personal Loan, Gold loan
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Co-operative banks, NBFCs
			</td>
		</tr>
		<tr>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Low – 127 million – 43% of market&nbsp;
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			MFI/SHG loans, Gold loans
			</td>
			<td style="background-color:#c6d9f1; height:0pt; vertical-align:top">
			Co-operative banks, SHGs, Gold finance companies,&nbsp;
			</td>
		</tr>
	</tbody>
</table>

<h3 class="credit_i_h3">Industry Overview&nbsp;&nbsp;&nbsp; </h3>

Borrowers <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">get gold loans</a> against their pledged gold items such as gold jewelry. Therefore, the quality and quantity of gold that is available to a customer is quite an important parameter in the determination of this market’s size. In 2019, the total gold loan outstanding in the organized sector alone was 5.5% of the total household gold holding in the country. This showed a very low market penetration. However, the same is expected to rise due to increased economic activity and gold monetization.

Let’s talk about the organized gold market now.&nbsp;

<h3 class="credit_i_h3">Organized gold loan market</h3>

This market is made out of public, private, co-operative and small finance banks. NBFCs or Non-Banking Financial Companies as well as Nidhi companies contribute to around 35% of the market. NBFCs giving specialized gold loans have consistently raised their market share after aggressive investment in promotions, branding and in geographic expansions. Geographic reach, presence and enhanced brand value continues to help NBFCs consolidate new markets by taking over a large part of their new customers.

Banks consider gold loans primarily as a means of meeting PSL or Priority Sector Lending, by offering such loans for other PSL purposes or for agriculture. Banks do not have flexibility and fast turnaround time, both of which are central for the gold loan customer segment.

Because of this problem with banks, NBFCs are in the perfect place and time to increase their gold loan customers and market share. An analysis of NBFC gold loan books show that their credit outstanding has grown at a rate faster than that of banks.

The arrival of Small Finance banks in the gold loan market segment as well as the arrival of Nidhi companies is further expected to increase the total customer base in the organized gold loan market. Such companies, who have more rural presence, and in the perfect place to serve customers with more financial inclusion. They are able to get funds at cheaper rates from deposits, and thus are a good competitor to NBFCs.

<h3 class="credit_i_h3">The Unorganized Gold Loan Market</h3>

Traditionally, gold loans have been provided to people by pawn brokers and money lenders, especially in rural areas. Currently, the unorganized gold loan market accounts for almost 65% of the total market share.

Unorganized market players have an advantage the others don’t have: local market knowledge. They also give gold loans faster and need less documentation. The downside is that they charge very high interest rates, and thus customers are always at a risk of getting exploited by loan sharks in the unorganized market.

With financial service companies trying to come into the unorganized market, a large part of the segment customers are shifting to such new entrants. Such a shift has aided many customers in getting loans from a formal credit system. It has helped new customers in getting credit records, which helps them to get more loans from the organized gold loan market.

With faster loan-processing capabilities and faster accessibility due to more branches, specialized gold loans from NBFCs are here to take over a large part of the unorganized gold loan market customers.

<h3 class="credit_i_h3">Development of online gold loan schemes</h3>

Today, there are many Fintech companies who are strong players in the gold loan market. These entities are now offering innovative products like online gold loans to the urban and young customers. The primary beneficiaries of such developments are urban, literate and digitally savvy customers between the ages 25 and 40.

Gold loan companies are now coming up with multiple operating models to strengthen online gold loan processing. The success of online gold loan schemes by different entities depends on operational efficiency from valuation, gold storage, loan disbursement, <a href="https://www.mymoneykarma.com/loans/repay-gold-loans-in-2020.html" target="_blank">loan collection</a> and closure.

<h2 class="credit_i_h2">Key challenges facing the gold loan industry</h2>

<h3 class="credit_i_h3">Gold price volatility</h3>

Gold price volatility has a strong impact on the general performance of all gold loan products. The Loan to Value Ratio, which is responsible for determining the liquid potential of gold items, is correlated negatively to gold price fluctuations. Therefore, an increase in gold prices will only result in companies giving loans with low LTV if they want to minimize risks. A decrease in gold prices will, on the other hand, increase a probability on loan delinquency since the pledged gold value goes below loan outstanding value.

Companies try to get over this problem of price volatility in gold prices by offering customers a shorter loan tenure, which helps to avoid negative impacts on NIMs or Net Interest Margins.&nbsp;

<h3 class="credit_i_h3">NBFC Liquidity stress</h3>

Do you know why there has been a series of AAA downgrades in NBFCs? Things which have seriously hurt the market confidence in the NBFC ability to boost credit ratings? This is because of the liquidity crunch. Till now, NBFCs were known to be able to deliver returns faster, and at the same time serving as entities offering credit to those who otherwise find it hard to get any kind of credit.

Now, NBFCs are finding it hard to get new funds or raise funds themselves to grow their business. Thus, they seek government aid. It should be known that NBFCs play an essential role in the Indian economy’s credit infrastructure, and have accounted for almost 1/4th of credit given to customers. NBFCs mainly deal in getting short-term funds, and then using long-term ones. This however leads to asset mismatches. It demands from NBFCs to raise capital continuously.

When there is economic growth, there is enough market confidence to support this rapid capital accumulation and disbursal, while not when there economy is in dire straits like it is now. NBFCs who give gold loans have complete control over the collateral, and therefore have borrowings at a lower cost. However, the liquidity still affects gold loan companies adversely.

<h3 class="credit_i_h3">More competition and substitute financial products</h3>

Today, companies giving gold loans are competing not only with other competitors, but also against financial service providers. The unorganized market is thrice the size of the organized gold loan market, and it is still growing with a lot of potential. The unorganized sector is being encroached by players from the organized market.

In the recent few years alone, the top gold loan companies are facing geographical saturation point, and are considering other products like microfinance and SME loans to maintain their growth. Customers who previously had to pledge gold to get emergency cash, now do not need to give any collateral. Lenders are now partnering with Fintech companies to use advanced technology to influence the market.&nbsp;

<h3 class="credit_i_h3">Microfinance firms</h3>

Nowadays, loan providing companies are facing stiff resistance from another front: microfinance firms. These firms are making it easier for customers to get small unsecured loans, even if they do not have a formal credit history. Banks have also entered the microfinance sector through business correspondence, thereby augmenting financial inclusion. Gold holding per loan has stagnated recently due to this rising competition, and is now seeing a downward trend.

<h3 class="credit_i_h3">Unsecured personal loans</h3>

The growth of <a href="https://www.mymoneykarma.com/loans/gold-loan-vs-personal-loan.html" target="_blank">unsecured personal loans</a> can be attributed primarily to the growth in the target customer base, which includes salaried people with high technological and financial literacy. The growth is boosted by players in the Indian telecommunications market, where players are trying to maximize their digital connectivity. Banks and NBFCs are doing this already to get customers of unsecured loans easily by aggressive marketing and competitive pricing.

<h3 class="credit_i_h3">P2P lending</h3>

After the introduction of Peer to Peer lending platforms, the new players are lenders with a very different risk appetite. This enables customers, even with poor credit history, to get loans from P2P platforms.&nbsp; The interest rate is larger, which is determined by the platform and the lender.

<h3 class="credit_i_h3">Employee attrition rates</h3>

Recently, employee attrition rate is proving to be a thorn in the side of gold loan companies. For instance, at a leading gold loan company in the country, the annual employee attrition rate is as high as 30%. This is a serious challenge to scalability and operational efficiency.

<h2 class="credit_i_h2">The Future of Organized Gold Loan market</h2>

&nbsp;The gold loan market, <a href="https://www.mymoneykarma.com/trending-in-finance/index.html/indian-gold-loan-market.html" target="_blank">by 2022</a>, is expected to reach up to INR 4,617 billion at a 5-year compounded annual growth rate of 13.4%.

Financial year 2019 has seen gold loan companies expanding aggressively their branch network. This is especially done in the northern and eastern states where the market penetration has so far been low. Companies are not focusing on optimizing asset utilization and using their current branch infrastructure to maximize their branch-level AUM as well as customer outreach.

2019 has seen the emergence of digital and online models in gold loans, as developed by NBFCs and the new Fintech companies. These have paved the way to an untapped market which was so far not available to the urban customers. The gold loan industry is to invest more in developing its current capabilities to serve customers better.

2019 also saw a price rise in gold metals, an all-time high. Thus, companies are expected to be a lot more conservative in their loan disbursal approach, at least till gold prices stabilize. Till then, companies shall promote low LTV and loans for the short term to mitigate gold price volatility risks.

Even though the price of gold is expected to fall globally, the gold loan market is expected to rise in India. This is due to banks becoming more stringent and selective in disbursing credit. Growth is also being fueled by expansion in new geographical areas.

&nbsp;

Gold Loan market in India is booming right now. How is this trend going to keep up in the future? Find out at mymoneykarma.

Gold loan Market in India 2021 - Demand for gold in India

&nbsp;

The last few years, the gold loan business has been performing quite well. In fact, its good performance has led many new companies to try their luck in this industry segment.&nbsp; Right now, however, the situation has changed drastically. The companies who arrived in the industry to try their luck, and even the big industry players who were already there, are having second thoughts. Should they bail out, shut down, or continue trudging onwards?

Right now, it is a dying business if you are an NBFC (Non Banking Financial Corporation). But if you are a bank, well, things are not so bad for you. The thing is that the RBI has put a whole lot of restrictions on NBFCs. There are many rules in place to curb their unchecked growth, and to bring the gold loan industry under a more national control under the RBI.

Since it was not possible if an NBFC operates without any regulations, the central bank now gives several guidelines and has imposed many restrictions on NBFCs. For instance, there are severe restrictions on an LTV that these institutions can have for <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">gold loans</a>.

<h3 class="credit_i_h3">What is happening right now?</h3>

Right now, NBFCs have to stick to a cap of 60% LTV. This means that if the value of your gold is Rs. 100, you will get Rs. 60 as the loan. Add in things like extra charges and processing fees, what you get in the end is pretty less. The situation for NBFCs this year is not good. In fact, many have projected a flat growth curve in 2020.

The RBI arrangement for more capital requirement for these institutions from 10% to 12% has heightened the problem. Things are bad enough to stop the expansion of major players in this industry segment like Manappuram Gold, Muthoot Finance and Shriram city. Some NBFCs are closing down their non-viable branches to overcome the current problem. The RBI has also restricted primary gold and gold coin sales by them.

<h3 class="credit_i_h3">A bad time for GFCs</h3>

When the NBFCs are losing, banks are winning in the gold loan business. Very recently, the RBI has denied all; requests by NBFCs to allow similar regulation of gold loan activity which the central bank has sanctioned for banks all over the country. All of this goes on to show that the RBI is concerned over NBFCs capacity to handle doing business in this sector, and to go on doing business in adverse situations like the pandemic lockdown.

We know that gold is one of the most powerful investment assets in the country. Recently, the huge import volume of the metal has strained its value in INR over foreign currencies. This has prompted the RBI to try bringing out gold deposits in homes that lie unused, sometimes for generations. To make this a possibility, the RBI needs reliable and strong channels like banks. These are controlled and regulated by the RBI. According to the central bank, NBFCs cannot be compared to banks, as these make up a very small part of this industry. However, these still need to be regulated from the center.

<h2 class="credit_i_h2">Are Banks better than NBFCs for Gold Loans?</h2>

As gold rates are soaring up, gold loans are becoming lifelines for traders, small businesses, and self-employed &amp; salaried individuals in search of relief from financial troubles caused by the pandemic. When it comes to deciding on a Gold Loan, one of the first calls is to decide on the financial institution - which can be either an NBFC (Non-Banking Financial Company) or a bank.

There are many factors to be taken into consideration before settling on an option, starting with interest rates and value for the gold right up to how safely the gold articles will be kept once they are pledged. When both NBFCs and banks claim to have an upperhand in each domain, how does one come to a conclusion? Here’s all you need to know on how Banks and NBFCs differ when it comes to Gold Loans:

<h3 class="credit_i_h3">Rate of Interest</h3>

Understandably, the amount that will have to be paid as interest is a primary concern for most borrowers. The rate of interest is decided by the lender depending on how much it costs for them to provide the funds. As NBFCs generally cannot draw sizable deposits, their interest rates tend to be quite high when compared to that of banks, who have easy access to much more capital. NBFC Interest rates can be as much as 24-29% whereas for banks, the rate is normally 11-16%. Moreover, banks are also likely to offer preferential interest rates for their existing customers.

<h3 class="credit_i_h3">The Loan to Value (LTV) Ratio</h3>

Loan to Value is the loan sum you can get for a given amount of collateral. The maximum such percentage that can be provided as a Gold Loan has been capped at 75% of the value of the gold, by the RBI. For instance, for gold that costs ₹ 10 lakh, you can avail a maximum loan of ₹ 7.5 lakh. However, as mentioned before NBFCs have to stick to a cap of 60% LTV, once again giving banks the upperhand.

<h3 class="credit_i_h3">Loan Duration/Tenure</h3>

Gold loans can provide funds for any kind of financial need. However, they are known to have short tenures, which makes them not qualify as long-term options. Even so, banks generally offer longer tenures as compared to NBFCs. For example, you can get a Gold Loan from HDFC Bank with tenures ranging from 3-24 months, while NBFCs have a maximum gold loan tenure of 12 months. Longer tenures help bring down borrowers’ monthly expense on repayment, which is a great relief when it comes to managing your budget.

<h3 class="credit_i_h3">Terms of Repayment</h3>

Both banks and NBFCs do well in this aspect. The following three options are offered by all lenders in general:

a) EMIs - This is the regular repayment schedule you can opt for on term loans, covering both interest and principal.

b) Interest Upfront – In this, you can pay interest first, and then pay the principal amount at the end of loan tenure.

c) Bullet payment - The bullet payment option lets borrowers repay as a lump sum on maturity; interest and principal together. Although the interest is calculated every month, it is collected only at the end of tenure.

If you choose to get a gold loan from a bank, <a href="https://www.mymoneykarma.com/loans/gold-loan-overdraft-vs-gold-loan-EMIs.html" target="_blank">Overdraft</a> facility also becomes one of the options available to you. If you avail your gold loan as overdraft, interest is calculated only for the amount utilised from your account. It also becomes easy to renew or top-up the loan. As per your expectations, you can choose from any of the above repayment options from a bank.

<h3 class="credit_i_h3">Easy Processing and Access</h3>

<a href="https://www.mymoneykarma.com/loans/gold-loan-vs-personal-loan.html" target="_blank">In comparison to personal loans</a> and other loans, gold loans are easy to avail and the process is quite straightforward. They are processed quickly, and don't need you to furnish income documents or credit score. So, all lenders manage to provide loans on the same day of application, within hours. A bank can even disburse a gold loan within just 45 minutes, with very little documentation.

<h3 class="credit_i_h3">Customer service</h3>

Responsible and accountable customer service is an important part in the process of availing any loan; as a customer, one might have a number of queries that need to be addressed. While NBFCs do have customer helpline numbers that are available during working hours on working days, banks tend to 24x7 customer service - offering instant solutions to all queries.

<h3 class="credit_i_h3">Additional Fees</h3>

The fine print for a gold loan can have certain charges that are added. It is important to be updated about the terms and conditions to save yourself from unpleasant surprises. Customers prefer to always look for a provider that offers complete transparency in this aspect. Banks generally have low processing rates and such other fees as compared to NBFCs.

<h2 class="credit_i_h2">Can NBFCs fight back?</h2>

All of these are having a serious effect on NBFCs. However, there is a silver lining in this dark cloud. They have more time to develop better financial products. Their market is a niche one, and that means they can reach more of certain sections of the customers that banks cannot. At the same time, they need to sustain their business longer and provide more, and certainly better financial products.

&nbsp;

NBFCs Gold Loan plans are finding it hard to compete in the market, with several restrictions and banks picking up their game. Find more about the state of NBFC gold loans at mymoneykarma.

Gold Loan From NBFCs  - NBFCs in the Gold Loan Industry

According to global reports and further predictions, <a href="https://www.mymoneykarma.com/gold-rate-india.html" target="_blank">gold prices</a> are now likely to reach the critical point of Rs. 4743 per gram.&nbsp;

Till now, the price of gold was seen to keep falling due to the Covid-19 pandemic. Clearly, it has affected the global economy badly. One of the industry sectors it has affected is the gold market, and associated market segments like gold loans. Now, till a few days ago, the price of gold was seen to fall steadily.&nbsp; However, just very recently, the price is surging up once more.&nbsp;

But why are prices rising? It is a sign of an economic revival all over the world? Is the pandemic going to be over soon? What does it all mean?

In the USA, the rise in prices is mainly due to the Federal government’s loose monetary policy because of two reasons. Firstly, it is due to the coronavirus and the ongoing-pandemic. Secondly, prices are rising due to the continuing geopolitical tensions between US and China. The demand for <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">Gold Loans</a> is also on the rise in India.

The real question that everyone is asking is what does the future hold for gold prices.&nbsp;

<h3 class="credit_i_h3">Gold price drops since Union Budget 2021</h3>

For quite some time, Gold prices have been reducing. The price skidded by Rs 2,000 per 10 grams in a matter of days, and silver prices have also been falling correspondingly.

This is said to be due to the budget-induced 250 basis point tax cut in customs duty, not to mention improving economic conditions, which have put heavy pressure on gold prices, as opposed to its steady growth before the budget. The effect seems prevalent in both the physical &amp; futures market, and gold is trading down nearly 5% from its pre-Budget price.

Some experts suggest gold will lose more value due to rising yields and the success in vaccination drives. Low level buying and wedding demand is seen to be the only means of support for gold price since the union Budget 2021.

<h3 class="credit_i_h3">Gold stocks and bonds</h3>

There is a reasonable positive relation between gold prices and stocks. Historically, gold is seen as a risk-off asset. Investors put money on gold when they do not believe that the stock market will rally.

NULLtheless, the most important point here is that the gold price is moving higher due to the government’s monetary support. The momentum is due to two reasons. The first reason is that the investors see the government’s effort as benign and encouraging. Gold price is benefitted by a weak currency. Lastly, many investors have not deployed their whole capital in equity, and are hedging risks by using gold.

<h3 class="credit_i_h3">Goldman Sachs Price Target</h3>

The company believes gold price rise is likely to continue. Their target for gold price is Rs. 5270 per gram. This goes to show that the gold rate has <a href="https://www.mymoneykarma.com/trending-in-finance/index.html/indian-gold-loan-market.html" target="_blank">very high potential</a> in the market right now.

Gold price has been on the rise of late. Why is this happening? For how long will this continue? Find out all the answers at mymoneykarma.

Why Gold Price is Rising ? | How Far Will It Go

The coronavirus or Covid-19 pandemic has affected the livelihood of people all over the country. Many have lost their jobs while others have to make do with 50% salaries. Some, even though are not laid off, have their salaries delayed by 2 or even 3 months. All of these have created a sense of panic and helplessness in daily-bread earners all over the country.&nbsp;

Earlier this year, the Government of India announced several measures to diminish the problems of the common man. These included ATM charge waiver, savings account non-maintenance charges fee waiver, and more.&nbsp;

However, from 1st July 2020, some of these relaxations shall be withdrawn. Here are the 5 money-related items which have come into effect from 1st July, 2020.

<h3 class="credit_i_h3">1) Restrictions on ATM use is back again</h3>

On March 24 this year, the government announced that for 3 months all debit card holders can make withdrawals from any ATMs without any withdrawal limit. From the 1st July, the regular charges and limits shall apply. Here are the numbers of free transactions a debit card holder can still make, according to the RBI. 
&nbsp;

<ol class="homeloan_Faqs_ul_1">
	<li>
	Transactions at bank’s own ATM from anywhere: A debit card holder now has a minimum of 5 free financial transactions in any month. This will not depend on the location of the ATM. Furthermore, there shall be an unlimited number of non-cash withdrawals for free. 
	&nbsp;
	</li>
	<li>
	Transactions from ATMS in metro cities: If the ATMs are located in any of the 6 Metro cities namely Chennai, Bangalore, Kolkata, Hyderabad, Delhi and Mumbai, savings bank accounts customers get a minimum of 3 free transactions per month. 
	&nbsp;
	</li>
	<li>
	Transactions from other bank’s ATMS at non-metro areas: From any other location other than the 6 metro cities mentioned above, banks will give savings account holders a minimum of 5 free transactions per month at other bank’s ATMs. 
	&nbsp;
	</li>
	<li>
	Charges when exceeding transactions limit: According to RBI guidelines, these can’t charges cannot be more than Rs.20 at maximum, per transaction. Applicable taxes are extra. 
	&nbsp;
	</li>
</ol>

<h3 class="credit_i_h3">2) Penalty charges for non-maintenance of bank account balance</h3>

A big relief measure provided by the Finance Minister Nirmala Sitharaman in March was the waiver of penalty on non-maintenance of one’s bank account balance. The waiver was for 3 months. This period is part now, and thus non-maintenance of bank account balance shall attract a penalty from now on. The penalty amount will differ from bank to bank.

<h3 class="credit_i_h3">3) Stamp duty on buying of mutual fund units and shares</h3>

From 1st July 2020, buying of mutual fund units and shares shall attract stamp duty. According to the FAQ published by the Finance Ministry, the previous system of giving stamp duties on securities caused multiple rates for the same financial instrument, which thus resulted in multiple incidences of duty and jurisdictional disputes. This in turn raised transactional costs in the security market and adversely affects capital formation. By the current amendment, the stamp duty shall be levied by one agency. Furthermore, the revised FAQ has clarified that there will be no stamp duty for redeeming mutual funds since it is neither a sale not a transaction. The duty is charged on the unit value, and does not include charges like GST, AMC fee, etc.&nbsp;

Stamp duty rates with effect from 1st July 2020

<table cellspacing="0" class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Instrument
			</td>
			<td style="height:0pt; vertical-align:top">
			Rate
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Issue of debenture
			</td>
			<td style="height:0pt; vertical-align:top">
			0.005%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Transfer and re-issue of debenture
			</td>
			<td style="height:0pt; vertical-align:top">
			0.0001%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Issue of security other than debenture
			</td>
			<td style="height:0pt; vertical-align:top">
			0.005%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Transfer of security other than debenture on delivery basis
			</td>
			<td style="height:0pt; vertical-align:top">
			0.015%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Transfer of security other than debenture on non-delivery basis
			</td>
			<td style="height:0pt; vertical-align:top">
			0.003%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Government securities
			</td>
			<td style="height:0pt; vertical-align:top">
			0%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Repo on corporate bonds
			</td>
			<td style="height:0pt; vertical-align:top">
			0.00001%
			</td>
		</tr>
	</tbody>
</table>

&nbsp;

Derivatives

<table cellspacing="0" class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Instrument
			</td>
			<td style="height:0pt; vertical-align:top">
			Rate
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Futures (Equity and Commodity)
			</td>
			<td style="height:0pt; vertical-align:top">
			0.002%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Options (Equity and Commodity)
			</td>
			<td style="height:0pt; vertical-align:top">
			0.003%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Currency and Interest rate derivatives
			</td>
			<td style="height:0pt; vertical-align:top">
			0.0001%
			</td>
		</tr>
		<tr>
			<td style="height:0pt; vertical-align:top">
			Other derivatives
			</td>
			<td style="height:0pt; vertical-align:top">
			0.002%
			</td>
		</tr>
	</tbody>
</table>

&nbsp;

<h3 class="credit_i_h3">4) Higher penal interest for delayed tax payments</h3>

A relaxation on penal interest for delayed tax payments was announced earlier this year as well. This included a relaxation of penal interest on delayed payments on self-assessment tax, advanced tax, regular tax, TCS, TDS, STT, equalization levy, CTT that are made between March 20 to June 20. It was also said that the interest rate shall be reduced to 9% from 12%. No fees and penalties shall be levied between the said period. Any delayed tax payment which is paid after June 30 shall bring an interest of 12% or 18% as applicable, instead of the previous 9%.

<h3 class="credit_i_h3">5) Change in auto-debit of Atal Pension Yojana</h3>

In April this year, Pension Fund Regulatory and Development Authority announced that auto-debits from bank accounts of APY subscribers, or Atal Pension Yojana subscribers, will cease till June 30. This decision was taken in the face of the fact that millions of people, especially the lower strata, were suffering due to the unforeseen pandemic and lockdown. The pension body shall start its auto-debit facility from July 1, 2020.

&nbsp;

Personal Finances are constantly changing in the country right now. Here are the latest changes you need to know about, presented to you by mymoneykarma. 

Top 5 Personal Finance Changes In India In 2021

A lot of people see gold ornaments only as jewelry for enhancing personal beauty. However, these can also serve as a backup plan in case emergency funds are needed. Gold jewelry indeed does have the power to save your life, business, property, and more.

By using these, it is easy sailing in the toughest of times. One of the easiest ways to get short-term loans is by pledging your jewelry to <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">get a gold loan</a>. Such loans are called gold loans, or loan against gold.

Perhaps you have already seen advertisements in movies of people giving over their jewelry to banks or lenders in return for immediate cash. Well, for once, all that happens in the real world too. You too can get a loan in a matter of hours or a single day when you go for a Gold Loan.

Traditionally, loans were provided against gold to borrowers by local money lenders or landowners. However, these did tend to have a very high interest rate. Today, banks and non-banking financial institutions offer gold loans, and the good news is that the interest rates are quite affordable. This is to ensure that everyone can access such loans in times of need.

There are, however, other loans that are similar to gold loans. The purpose of such loans is similar as well, that is to give customers the cash desired fast, without any hassles. These loans include personal loans and credit card loans. All gold loans, personal loans, and credit card loans have their own unique advantages and disadvantages.

However, <a href="https://www.mymoneykarma.com/loans/gold-loan-vs-personal-loan.html" target="_blank">gold loans fare better</a> than the others because these are secured loans. The bank keeps your gold ornaments as a security. Besides, the money it gives you is maximum 80% of the value of your deposited jewelry. In case one defaults on the loan, the bank still profits.

The good news is that it is easier to pay off gold loans. This is because the collateral helps lenders to give you loans at lower interest rates, when compared to personal loan or credit card loan interest rates. Applications of gold loans are processed faster as well, and these need minimum documentation. Thus, banks and NBFCs have 4 ways to repay gold loans. You can even alter between them, in some banks.&nbsp;

<ol class="homeloan_Faqs_ul_1">
	<li>
	Pay interest and EMI and pay principal later: When you choose this option, you finish paying the interest part of the loan first, and then once this is done, you tackle the principal amount. The principal is to be paid at the time of loan maturity. This arrangement works for most borrowers because they do not have to worry about paying principal while paying off the interest.
	</li>
	<li>
	Partial payments:&nbsp;This means making partial payments of both the principal and the interest. You can choose to pay one and the other as and when you desire. Thus, amongst all the other payment options, this is the most flexible. In this option, it is not as important to conform to the EMI schedule. This is therefore a very customer-centric payment option for gold loan customers. You can have partial or complete payment of interest and principal. The payment schedule here is not important. If you repay the principal first, your interest rate decreases. That way, you can save a lot of money.
	</li>
	<li>
	Bullet repayment:&nbsp;Under this payment plan, you are to pay the whole amount. That means paying the principal and the interest at the end of the loan term. That means you do not need to worry about paying interest and principal during the term, but only when the term is finished.
	</li>
	<li>
	Regular EMI payments: This is the plan we know most. It is catered to the salaried customers. In this plan, you have to pay interest at the end of each month. The EMI is inclusive of both the principal and the interest.&nbsp;
	</li>
</ol>

In conclusion, you can prepay most gold loans from banks and NBFCs since most do not have a prepayment penalty, or a minimum lock-in period. Once the loan is repaid, the bank manager will contact you for returning you your gold jewelry. Need a gold loan yourself? <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">Apply for a gold loan</a> with us right away!

&nbsp;

Repay gold loans in any of the 4 differnt ways given here, and enjoy  great flexibility in your finances. Find out about the many ways to repay gold loans at mymoneykarma.

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