• JANUARY 31, 2000

State Bank announces new retail financial products

A leading financial daily has reported that The State Bank of India has plans to launch two financial products for retail investors – loans against mortgage of immovable property and gold metal loans.

Speaking to the press, Mr. A. K. Purwar, chief general manager SBI said that the bank would offer loans to retail customers against the mortgage of their properties for up to Rs 1,000,000. The loans have been structured in the same way as personal loans, the only difference being that of tenures - loans against the mortgage of property will be available for longer tenures.

The second product – gold metal loans are aimed at deploying the gold mobilised by the Bank through its gold deposit scheme. The metal collected through this scheme will be made available to the jewelers who will repay the loan in metal form.

The move will help more inflow of gold in the system providing increased liquidity to the immovable property market. The Bank will be able to put to use its gold stock, earning interest on the same. The jewelers in turn will get another legal source of supply of the metal. The increased supply of gold metal through this scheme and similar schemes (which are expected from other banks) will surely lead to a diminishing import value for the metal and a consequent decline in a the country’s foreign currency payment.

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