This post played on the mind for long. I just didn’t have the courage to spell my fears. For some time now we are hearing and seeing a bit too much that makes us lose the famous Indian complacency. I had been one of the ardent believers of the shining India story. But now I feel the façade is giving away at a mind boggling pace to show the hollow innards of the system. But Iam not trying to bring attention to the majot topics of the day like the telecom scam or Radia tapes, but bring to light a fast spreading phenomenon that can leave the people in the shackles of penury.
GOLD LOAN – a new nomenclature for the old pawn broking business. Many years ago the leaders of newly independent India had taken efforts to push these to mere existence and showed people that banking was a safer and saner solution to financial needs. The habit of saving was inculcated in us and the gold was safest investment and saved to deal with the needs of future.
With increased consumerism, the needs have escalated but the incomes of all haven’t. Senseless borrowing seems to be order of the day. The condition is much like the Hindi sayng”Aamdaani athanni aur karcha rapaiya’ ( income 50 paise and expenditure a rupee). You get loans of all kinds – education, car, vehicle, house, personal needs, business etc. Earlier you went to the bank of financial institution for a loan, now they are after you asking you take a loan. But even with this kind of banking approach, people just want more money faster. Result, they opt for GOLD LOAN. They pawn the ornaments with some new age sahukars and get the money and if the business idea fails end up paying exorbitant interest that squeeze the life out of families.
The GOLD COIN investments are yet another nice way to trap the naïve. A closer inspection to the terms of these brings forth the fact that there is no sale involved. You believe that you invested in gold but have actually pawned the gold. I hope some journalist publishes details of these and people can be saved.
A look at the statistics shows that hundreds of new offices of these not so holy NBFCs have opened. They have made inroads to hitherto unchartered territory snuffing the future out for many. The loans have helped some but harmed many.