Exploring The Value Of Gold

EXPLORING THE VALUE OF GOLD

IS THE NEED FOR THE INDIAN ECONOMY

Since Human discovered gold, a radical change has been witnessed in the human civilization. Gold has got importance in several ways and was made use in medicines, Electronics, Jewellery, wealth, etc , apart from all this, 20th century has witnessed a new phenomenon called “Exploring the Value of Gold for the development of Economy” Unless exploring the various option with regard to value creation , gold remains as dead investment and does not contribute any thing to the investor and the economy. Here are the few ways to explore these option :1) Promotion of Lending against Gold 2) Implemenation of Special law for Jewel Loan business 3) Allotting special Status for money lending institutions - In respect of Capital Adequacy, SLR, NPA, Credit Risk Weightage , Certification , Security, Resource mobilization, operation, Taxation and so on. Favouring Elements :India being the largest consumer of gold and an emerging global gaint in the accumulation of gold reserve have around 15000 tonnes plus of gold under private holding. if we can explore the liquidity option on these reserve then this it self can create a dynamic change in economy. Normally Indians have sentimental value to their ornaments as it has been served to them either by ancestral relationships such as dowry, gifts, etc. Normally 90% of the Indians have investment in gold either directly or indirectly, saving habits especially in gold makes, Indians an unique saving group in the world. Culture & Religion also makes gold an auspicious element, every god in India uses to wear gold ornaments, offerings to god , by way of gold is also an unique feature which can be witnessed in India by large. Tirupathi Temple, Guruvayoor Temple, Sabarimala Temple and so on are in line with these feature. In India traditionally, gold jewellery is an inevitable element for marriage functions, Birth day functions, child birth, etc. Constraints to Money lending against Jewellery a) Lacks strict Rules and regulations against spurious rackets involved by jewellers, gold smith etc.

b) Improper security systems to protect the firm from burglary, robbery, theft, Staff associated frauds etc. c) Exists Inherent risk which is not visible from normal eyes d) Lacks an window for hedging the price risk

ACHIEVERS IN THIS FIELD MANAPPURAM GROUP OF COMPANIES, the pioneers in gold loan has floated an exclusive NBFC for GOLD LOAN , named as MANAPPURAM GENERAL FINANCE AND LEASING LTD, today it is India’s Largest Listed and Highest credit Rated Gold Loan NBFC . Since incorporation in the year 1992, business of the group has witnessed tremendous growth, and by 2020 company may emerge as the largest gold reserve loan company in the world next to few Social Organisations.

By Raghu.G 09 847715645