Kerala State Financial Enterprises Chairman said the authorities had taken note of a report in The Hindu on how in some States an exorbitant rate of interest was being imposed on those desperately seeking money for COVID-19 treatment.
The Kerala State Financial Enterprises (KSFE), which has a gold loan business of around ₹3,000 crore a year, has announced gold loan at concessional rate and with minimum formalities for those infected by COVID-19 and their immediate family members.
Chairman of the public sector finance company Peelipose Thomas told The Hindu on Sunday that the step was being taken to prevent the patients and their families from being driven to informal money lenders as had been happening in some of the States.
He said that the KSFE authorities had taken note of a report in The Hindu on how in some States an exorbitant rate of interest was being imposed on those desperately seeking money for COVID-19 treatment.
The gold loan to the KSFE targeted category would be at 5.5% a year, 2% less than the lowest rate of normal gold loan, he added. The upper limit of the loan was ₹1.5 lakh.
The scheme would open on Monday and the business hours was up to 1 p. m. with COVID-19 restrictions. “We have set aside auction of the normal chitties to ensure that gold loans applications in the category are attended to,” said the chairman. The loan was expected to be cleared in about 15 minutes and there would be minimum formalities for clearance. The applicant would have to bring the gold, provide an identity proof as well as proof of being an immediate family member of the COVID-19 affected person, he said.
The KSFE chairman said that the financial institution had great reach in the State with its 625 outlets, with one for every two villages.
The KSFE had come out with a similar scheme, providing up to ₹1 lakh to those who returned from the Gulf countries in the first wave of the pandemic. The loan was given out at an interest rate of 3%. It has also donated ₹5 crore to the Chief Minister’s Vaccine Challenge Fund.
Meanwhile, gold-based lending has been sluggish in Kerala in April though there appeared an upswing as COVID-19 restrictions were withdrawn towards the end of last year and early this year. The growth in gold-based loan business had been normal during the last financial year, said sources in a leading NBFC in the State on Sunday.