INTRODUCTION

IIFL was founded in October 18, 1995 by Mr. Nirmal Jain (Chairman and Managing
Director) as an independent business research and information provider. It gradually evolved into
a financial services solution provider. IIFL has a network of 3000 business locations spread over
more than 500 cities and towns across India.
IIFL is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange
(NSE) for securities trading; with MCX, NCDEX and DGCX for commodities trading; and with
CDSL and NSDL as depository participants. IIFL is registered as a Category I merchant banker
and is a SEBI registered portfolio manager.
IIFL is a one-stop financial services shop, most respected for quality of its advice,
personalised service and cutting-edge technology. They have come a long way since their
inception and made a mark in the industry. The IIFL group, comprising the holding company,
India Infoline Ltd and its subsidiaries, is one of leading players in the Indian Financial Services
Space. IIFL offers advice and execution platform for the entire range of financial services
covering products ranging from Equities and Derivatives, Commodities, Wealth Management,
Asset Management, Insurance, Fixed Deposit, Investment Banking, Loans(Gold, Home,
Mortgage, Commercial Vehicle).
IIFL recently received an in-principle approval for Securities Trading and Clearing
memberships from Singapore Exchange (SGX) paving the way for IIFL to become the First
Indian Brokerage to get a membership of the SGX. IIFL also received membership of the
Colombo Stock Exchange becoming first foreign broker to enter Sri Lanka. IIFL owns and
manages the website, www.indiainfoline.com, which is one of Indias leading online destinations
for personal finance, stock markets, economy and business.
IIFL has been awarded the Best Broker, India by Finance Asia and the Most Improved
Brokerage, India in the Asia Money Polls. India Infoline was also adjudged as Fastest Growing
Equity Broking House-Large Firms by Dun & Bradstreet.

A forerunner in the field of equity research, IIFLs research is acknowledged by none

other than Forbes as Best of Web and a must read for investors in Asia. IIFLs research is
available not just over the internet but also on international wire services like Bloomberg,
Thomson First Call and Internet Securities where it is amongst one of the most read Indian
Brokers.
The Net worth of India Infoline Limited is INR 200/- crore and market cap of over
INR.3716.16/- crore. The company has a network of 4000 business locations (branches and subbroker) spared across 900 Cities and Towns. It has more than 2 million customers. The company
has reported consolidated sales of Rs. 687.47 crore and and Net Profit of Rs.70.64 crore for the
quarter ended Dec. 2013
India Infoline Finance Limited is professionally managed and the shares the professional
values and ethos of its parent company. IIFL has acquired and maintained a reputation for
reliability, transparency of operations and absolute integrity. A steady growth rate validates the
trust that industry has reposed in the Company. IIFL offers advices and execution platform for
the entire range of financial services covering products ranging from Equities and Derivatives,
Commodities, Wealth Management, Asset Management, Insurance, Fixed Deposits, Loans,
Investments Banking, Gold Bonds and other small saving instruments
IIFL is near you physically: You can reach them in a variety of ways, online, over the
phone and through their branches. All their offices are connected with the corporate office in
Mumbai with cutting edge networking technology. The group caters to a customer base of about
2 million customers.

BOARD OF DIRECTORS

Mr. Nirmal Jain

Chairman, India Infoline Ltd.

Mr. Nirmal Jain is the founder and Chairman of India Infoline Ltd. He is a PGDM (Post
Graduate Diploma in Management) from IIM (Indian Institute of Management) Ahmedabad, a
Chartered Accountant and a rank-holder Cost Accountant. His professional track record is
equally outstanding. He started his career in 1989 with Hindustan Lever Limited, the Indian arm
of Unilever. During his stint with Hindustan Lever, he handled a variety of responsibilities,
including export and trading in agro-commodities. He contributed immensely towards the rapid
and profitable growth of Hindustan Levers commodity export business, which was then the
nations as well as the Companys top priority.
He founded Probity Research and Services Pvt. Ltd. (later re-christened India Infoline) in
1995; perhaps the first independent equity research Company in India. His work set new
standards for equity research in India. Mr. Jain was one of the first entrepreneurs in India to seize
the internet opportunity, with the launch of www.indiainfoline.com in 1999. Under his
leadership, India Infoline not only steered through the dotcom bust and one of the worst stock
market downtrends but also grew from strength to strength.

Mr. R. Venkataraman
Managing Director, India Infoline Ltd.

Mr. R Venkataraman, Co-Promoter and Managing Director of India Infoline Ltd, is a

B.Tech (electronics and electrical communications engineering, IIT Kharagpur) and an MBA
(IIM Bangalore). He joined the India Infoline Board in July 1999. He previously held senior
managerial positions in ICICI Limited, including ICICI Securities Limited, their investment
banking joint venture with J P Morgan of US, BZW and Taib Capital Corporation Limited. He
was also the Assistant Vice President with G E Capital Services India Limited in their private
equity division, possessing a varied experience of more than 19 years in the financial services
sector.

IIFL CORPORATE STRUCTURE AND VISION

IIFL VISION
To become the Most Respected Company in the financial services space in India

IIFL Values GIFTS

Services

Growth

Transperenc
y

Integrity

Fairness

1. Growth

IIFL believe in setting challenging targets and achieving them.

Once IIFL have set target for any business, they work aggressively to achieve the same.

IIFL has grown from a search firm in 1995 to a leading financial powerhouse in less than a
decade. From research, now the company provides the entire range of services including
Institutional Broking, Investment Banking, Wealth Management Services, Life Insurance
Distribution, Credit and Loans and Gold Loans. In the last five years IIFL has grown at a
compounded annual rate of 30%.

Today, the company has one of the widest networks across the country with more than 3000
business locations spread over more than 500 cities and towns across India facilitating smooth
acquisition and servicing of a large customer base.

2. Integrity
At IIFL they believe all employees to implement things which are legally morally and ethically
correct Integrity is the cornerstone on which business is built. No short cuts compliance is
necessary for business to grow. A cardinal rule no compromises on ethics and any wrong act
like even fudging a travel bill will mean termination.
3. Fairness
IIFL give all their people equal opportunities.
Ideas / suggestion are always heard by management irrespective of the hierarchy. Merit is the
sole determinant in the career growth of an IIFL employee. The appraisal process in IIFL is
transparent with the employee being evaluated on clearly defined parameters. There are internal
job postings which are posted at regular intervals. IIFL always prefer to fill in vacancies by
internal promotions and only then recruits from external source are considered.
4. Transparency
At IIFL most of the information is available on intranet IWIN (India Infoline Web based
Information Network) via circulars and policies. Employees can also directly communicate with
the top management via the IWIN Q&A (Question & Answer) feature.
5. Service
We believe in acquiring customers, retaining them and keeping them happy. The essence of good
customer service is in forming a relationship with customers for life.

CSR INITIATIVES BY IIFL

IIFL organizes many activities as a part of its corporate social responsibility initiative.
Employees participate as volunteer at these events.
Some of IIFLs CSR initiatives are listed below

FLAME Financial Literacy Agenda for Mass Empowerment

IIFLs initiative FLAME, Financial Literacy Agenda for Mass Empowerment, was
launched a year ago. Since then, IIFLs financial literacy campaign gathered momentum
and has covered tens of thousands of investors. The initiative has also covered teenage
school students, underprivileged women living in slum areas, and physically challenged
people across the country. The initiative has taken a multi-pronged approach, spreading
financial literacy through newspaper advertisements, literacy workshops, books and
publications, a financial literacy help-line, the FLAME portal, and social media channels.

IIFL regularly conducts eye donations camps, medical camps and blood donation camps.
Active participation of employees is encouraged in running the whole process.

IIFL BUSINESSES

1. Broking
Retail One of the leading brokerage houses in the nation with options to invest

in Equity, Commodity and Currency.

Institutional High Quality Research and block placement capabilities.

2. Wealth Management
Advisory IIFL are on the leading Indian Players in Wealth Management and
having Assets under Advisory above 200bn.
3. Financial Product Distribution
Insurance Leading non-banking distributor of Life Insurance Mutual Funds and
other savings products.
4. Investment Banking
Primary expertise is Equity Capital Markets with a view to leverage institutional
and retail distribution capabilities.
5. AMC- ASSET MANAGEMENT COMPANY
Successfully launched own Mutual Fund with NIFTY ETF and IIFL FMP.
6. Credit and Finance
Mortgage and Gold Loans
Healthcare Financing

GOLD AND THE INDIAN SOCIETY

Gold has been a valued commodity, particularly in India where it is considered

auspicious. It has traditionally been among the most liquid assets and is an accepted universal
currency. Gold is presumed to be safe haven in times of economic uncertainty, a fact exemplified
by a 58% increase in the value of gold over the past 5 years.
India has traditionally been a leading consumer of gold in the world. Its domestic
production has, of late fallen to insignificant amounts compared to the total demand. It has
grown into one of the largest markets for gold, accounting for approximately 10.2% of the total
world gold stock as of 2010. Rural India accounts for 65% of this gold stock.
Indian households typically have an emotional attachment and sense of personal
belonging to the gold they own, which is usually in the form of jewellery, coins or bars. Thus,
gold owned by Indian families is rarely liquidated unless extreme financial need consequently,
monetary value of a gold investment is rarely realized. But, pledging gold ornaments and other
gold assets to local pawnbrokers and money lenders to avail loans has been prevalent in the
Indian Society for many decades, particularly in the rural areas. However, over the past decade,
the organized sector banks and NBFCs have taken the lead. The urban populace is also
beginning to realize the potential value that can be realized through gold loans, which has led to
rapid growth of the gold loan market in India.

GOLD DEMAND AND PRICE MOVEMENT

10

Global Scenario
India's gold demand remained buoyant in calendar 2013 at 975 tonnes, up by 13 per cent
on the figure for 2012, despite government putting in several restrictions to curb imports,
according to a World Gold Council report. Gold demand in the country was 864 tonnes during
2012, according to data given in WGC 'Gold Demand Trends 2013' report.
The total jewellery demand in the country in 2013 was up by 11 per cent at 612.7 tonnes
valued at Rs 1,61,750.6 crore compared to 552 tonnes valued at Rs 1,58,359.1 crore in 2012.The
total investment demand for 2013, was up by 16 per cent at 362.1 tonnes from 312.2 tonnes in
2012.In value terms, gold investment demand rose by six per cent at Rs 95,460.8 crore against
Rs 90,184.6 crore in 2012.
The traditional demand for gold has been in household jewellery consumption, industrial
use and investment purpose; it has been seen as a safe haven during the time of financial
turbulence. Recently, many current account surplus countries from Asia, Central Asia and Latin
America have preferred buying large quantities of gold to diversify their foreign exchange
reserves. More recently, the global demand for gold is underpinned by increased demand in
China, continued central bank purchases and inflow into gold related exchange traded funds
(ETFs).

Global Gold Supply and the demand for gold in India

11

Trends in global gold supply and the demand for gold imports from India are portrayed in
Table 1.1. While global gold supply is more or less flat, the share of demand for gold imports
from India in the global supply rose steadily in recent years. When the growth in global gold
supply has been weak, the growth rate of Indian demand for gold is strong at double digits in
more recent years.
Year

Global Gold

Gold

Growth of

Growth of

Supply ($)

Demand

Global Gold

Gold

from India

Supply (%)

Demand

(Ton.)

from India
(%)

2002

3667

467

-2.6

-0.9

2003

3953

367

7.8

-2

2004

3426

537

-13.3

46.1

2005

4034

792

17.7

47.5

2006

3559

707

-11.8

-10.7

2007

3554

716

-0.1

1.3

2008

3657

679

2.9

-5.1

2009

4146

743

13.4

9.4

2010

4274

871

3.1

17.2

2011

4030

975

-5.7

11.9

2012

4130

1079

2.5

10.7

2013

4750

2054

1.15

13.0

SOURCE: IIFL LOAN BRANCH

12

As shown in Chart 1.1 International Gold Prices have risen exponentially in the last
decade. Since 2002, the international gold prices have been grown at compound annual growth
rate of 18%. One of the major components of gold demand in recent years has been investment
demand at global level. More importantly, volatility in international gold prices in the recent
quarters is positive skewed implying that it provides fewer large losses and a greater number of
larger gains.
Chart 1.1 also confirms that the gold demand has shown a growth at compound annual
growth rate of 8% during the last decade i.e. 2002 to 2012/2013. Such behavior of Gold prices
assumes importance building up to positive expectations by gold investors.

CHART 1.1 GOLD PRICE vs GOLD DEMAND TREND IN INDIA

5000
4500
4000
3500
3000
2500

Global Gold Supply

Column4

2000
1500
1000
500
0
2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

As regards the underlying factors for explaining international gold prices, studies suggest
that the international gold price is complex phenomenon affected by economic and political
environment. While in the short run, trend in the gold prices could be due to inter- commodity
13

substitution on account of movement in their relative prices, in the long run, gold can be used as
an instrument to hedge against inflation. History shows that during periods of financial
turbulence, gold becomes an attractive asset class for investment. More recently, after the 20082009 financial crisis, the demand for gold as collateral has also increased as it does not involve
credit risk and its price generally exhibits counter-cyclical behavior. Similarly, transparent
pricing of gold as compared to other assets may also be another positive factor for its demand.

GOLD LOAN MARKET IN INDIA

In India, it is believed that the most of gold is held by people in the rural areas and in
many cases this is the only asset they have in their possession though in small quantity. All the
while, rural Indians know that if his, crop fails or his family is sick, he can raise cash in a
moment from the goldsmith or may be pawn brokers and money lenders, because the rural India
lags in availing the banking facilities. Therefore, even the pattern of saving in India differs from
various income groups. While richer sections diversify their portfolio according to risk-return
equation, the poor rely more on commodities like gold as well as silver. The jewellery bought in
times of prosperity has been pawned or sold for cash in periods of distress or need. Over the
years, some portion of this is being used as collateral for borrowing in the Informal market,
though estimates is not available. It is a common practice in India that gold is pawned, bought
back and re-pawned to manage day-to-day needs of the poor and the middle class. The pledging
of gold ornaments and other gold assets to local pawn brokers and money lenders to avail loans
has been prevalent in Indian society over ages. Due to the increased holding of gold as an asset
among large sections of people as also the borrowing practices against gold in the informal sector
have encouraged some loan companies to provide loans against the collateral of used gold
jewelleries for years and over a period to emerge as Specialized Gold Loan Companies.
Some independent estimates indicate that rural India accounts for about 65% of the total
gold stock in the country. At times of emergency, gold ensures a loan almost instantaneously for
the poor without any documentation. Most of the loans are for meeting unforeseen contingencies
and may be categorized as personal. Further, growth in middle income classes and increase in the
earning capacity of women, a core customer group for gold is expected to further boost the
demand for gold.
14

This perception towards Gold loan has gradually undergone a change and individuals
have started seeing the value of loan against gold as against availing a personal loan. The Gold
loan market that was highly fragmented and dominated by local jewelers has gradually seen the
entry and growth of NBFCs and banks; a clear indication of the viability of Gold loans as an
important loan product.
The gold loans market has recently seen a lot of action from both the consumers and the
industry. With gold spiraling upwards, borrowers are able to get decent valuation for their gold;
and the process of getting such a secured loan is also largely hassle free. The southern Indian
markets have been particularly lucrative of the gold loan business; - 85% - 90% of the gold loan
market is in the States of Andhra Pradesh, Tamil Nadu and Kerala.
According to an estimation of the ICRA Management Consulting Services (IMACS), the
organized gold-loan market in India stands at $8 Billion and is growing at a compound annual
growth rate (CAGR) of 40% since 2002. There is still ample potential in this segment and with
more banks/ NBFCs coming into this business, there could be considerable growth in terms of
volume

15

PERSONAL LOAN vs. GOLD LOAN

This is a simple modification of the age-old practice by money lenders and has been
institutionalized by the banks now. In this loan one has to deposit the household gold in the form
of jewellery with the bank or financing agency and get a loan of up to 80% of the value of gold
deposited. The process also requires proper documentation such as submission of identify proof,
PAN Card, address proof, etc. The interest rate in this case is much lower than a pure personal
loan as there is security being provided by the borrower. The processing time for personal loans
against gold is quite less as compared to other loans.
How is it different from a conventional personal loan?

This kind of a loan is basically a secured loan as the gold is deposited with the bank

The repayment tenures of such loans are typically shorter, extending to a maximum of 12
months in most cases

The amount of loan in such a case depends on the value of gold being deposited rather
than the repaying capacity of the individual, which plays a lesser role here

The interest rate of a personal loan against gold is lower than that of a pure personal loan
and ranges around 11-15%.

There is some amount of risk which the financer takes depending on the movement of
gold value in the interim period.

Key Benefits of Personal Loan against Gold:

The processing time is less and the requirement of documentation is also reduced.

16

Timely payment is ensured as most Indians relate emotionally to gold and would not like
to lose their family jewellery through defaults.

The interest rates are favourable in case of personal loans against gold

COMPARISION OF CHARGES BETWEEN PERSONAL AND

GOLD LOAN

CHARGES

PERSONAL LOAN

GOLD LOAN

Interest Rates

14.25% to 19%

11.5% to 13% p.a (depending

on gold value)

Added Fees

Processing fees of 2% to 3%

1%

of

the

loan

amount

(depending upon the bank)

Added Fees

2%

to

3%

Pre

Payment No pre payment charges

Charges
Maximum Loan

Rs. 50,00,000

Rs. 1,00,00,000

Maximum Tenure

7 years

2 years

SOURCE: IIFL GOLD LOAN BRANCH

17

GOLD LOAN-ITS SAFEGUARDS

A. Ownership of Ornaments
It is advisable that the advances are made to persons properly introduced to the bank. The bank
should satisfy itself about the ownership of the gold ornaments etc. before accepting them for
pledge. The bank should obtain a declaration form the borrower that the ornaments are his own
property and that he has the fullest right to pledge them to the bank. Taking of ornaments for
pledge and release thereof to the parties concerned after repayment of the banks due should be
done strictly in the authorized officials room to avoid any risk.
B. Appraiser
The bank should appoint an approved jeweler or shroff as an appraiser for valuation of the gold
ornaments proposed to be pledged to the bank and obtain adequate security from him in the form
of cash and indemnity bond. Valuation and appraisal of the ornaments in the banks premises
itself would be ideal but when these are not possible, the bank should take suitable precautions
against their loss while in transit. The bank should send the ornaments to the appraiser in a
locked box, one key of which should be kept with the appraiser and the other with the bank. The
box should be sent through a responsible member of the staff along with the prospective
borrower. The placing of ornaments in the box at both the ends should be done in the presence of
the employee carrying the ornaments to the appraiser and the borrower. In the case of IIFL Gold
Loan branches, the two valuers and the branch manager appraise the gold ornaments.
C. Valuation Report

18

The valuation certificate of the appraiser should clearly indicate the description of the ornaments,
their finesse, and the gross weight of the ornaments, net weight of the gold content exclusive of
stones, alloy, strings, fastenings and the value of the gold at the prevailing market price. The
valuation report should be duly signed by the appraiser which should be kept along with the loan
documents of the bank

D. Record Of Security
The full name of the borrower, his residential address, date of advance, amount and description
of the ornaments in detail should be recorded in the gold ornaments register which should be
checked and initialed by the Manager
E. Custody of Ornaments
The ornaments belonging to each borrower (or articles of each loan) together with a list
indicating the description of ornaments, gold loan account number, name of party, etc. should
separately in small cloth bags. A tag indicating loan account number and name of the party
should be tied to the bag to facilitate identification. The bags should be arranged in trays
according to loan account numbers and kept in the strong room or fire proof safes under joint
custody
F. Period
The period of advance against gold ornaments should be generally restricted to 6 months or 1
year
G. Margin
Adequate Margin on the market value should be maintained. The bank should collect interest on
advances promptly. In no circumstances should it allow to water down the margin by debiting the
interest accrued to the loan amount
H. Return of Ornaments

19

On repayment of the loan together with the interest payable in the account, the ornaments should
be returned to the borrower and his receipt obtained in token of having received the ornaments.

I. Part Release

While allowing part release of the ornaments against part repayment of the loan, care should be
taken to ensure that the value of the left-over ornaments is sufficient to cover the outstanding
balance with the margin prescribed in the account.

J. Delivery to third Parties

When the ornaments are delivered to third parties, a letter of authority from the borrower and
subsequent confirmation of the borrower should be obtained. The letter of authority should
contain an undertaking by the borrower, absolving the bank of any responsibility in the event of
dispute or loss arising from the delivery of the ornaments to the party named therein. The receipt
of the third party should be obtained on the letter of authority as well as in the gold loan ledger.

K. Default
When the borrower fails to repay the loan on the due date, a notice calling upon him to repay the
loan within a specified time should be given and if no response is received, a reminder should be
sent by registered post informing the borrower that the ornaments would be auctioned and after
adjusting the sale proceeds against the outstanding dues to the bank, the balance, if any, would be
paid to the borrower against his receipt.

L. Re-pledge of Ornaments
It is not advisable for banks to make advances against re-pledge of ornaments as this facility is
likely to be misused for financing moneylenders, which is not a desirable activity.
20

M. Insurance
The jewels pledged to the bank should be insured for the appraised value against the risk of
burglary. Surprise verification of the packets containing gold/silver ornaments by an officer
other than the joint custodian is undertaken and should be recorded in a separate register with
necessary details.

CARAT & KARAT

Purity of gold is measured in terms of Carat in U.K. and as Karat in U.S.A.

100% purity is not available, because sometimes other metal particles may be available
while refining. So, the pure gold is denoted as 24 Karat or 99.99% Gold.

ISO Standards of Gold Purity

Karat

Percentage (%)

24

99.99

22

91.60

21

87.50

18

75.00

14

58.50

37.50

Carat
21

Generally Karat denotes the purity of Gold and Carat denotes the weight of the Gems and
Diamonds.
Carat

Weight

1 Carat

0.200gm (or) 200mg

1 Carat

100 Cents

1 Carat

0.002gm (or) 2mg

PRODUCT FEATURES OF GOLD

Secured

Loan is borrowed against the gold deposited by the applicant

Multi-Purpose

The loan can be used for any purpose, as long it is not illegal activity

Low Disbursal times

NBFCs and the unorganized sector disburse loans at a much faster

pace( as low as 3 minutes to few hours) compared to banks

High Loan To Value

Banks typically not give more than 75%, NBFCs with RBI cap lends

(LTV)

almost 75%

Shorter loan tenures

Most lender offers no minimum period; average tenure is about 100-120

days

22

Varied interest rates

Depends on tenure and amount of loan. It varies from 12% to 18% in case
of banks, while for NBFCs it could reach 24%. Unorganized sector
charges higher in range from 30%-50%.

Multiple

Repayment

Options

Repayment in terms of interest only during the term and principle in end
or, repayment through EMI covering interest as well as principle; Most
payments are in case

SOURCE: IIFL GOLD LOAN BRANCH

INDIA INFOLINE FINANCE LIMITED-GOLD LOAN

Gold loan or loan against is the easiest and quickest way for servicing your financial
needs. To avail a gold loan, all you need to do is pledge your gold ornaments with them and they
would provide you with a loan amount as per the market value of your gold. Unlike other loans,
gold loan does not require you to provide income or salary proof. Moreover, it has comparatively
lower interest rates; requires lesser documentation, and hence is processed in lesser time.
IIFL provides maximum loan against your gold at lowest interest rates. They also have a
strong presence Pan- India and have serviced a large number of customers in a very short span.
They offer different types of schemes as per your requirement and convenience. Following are
the main features of their loan:
The Main Features:
The secondary study suggests that IIFL are performing well in terms of the features
offered and flexibility of their offerings. The chart provides with the feature details:
Features

IIFL GOLD LOAN

Turn Around Time (TAT)

5 Mins to 30 Mins

Working Hours

9:00 AM TO 6:00 PM

Loan-To-Value (LTV)

70% to 75%

23

Interest Rates

18% to 21%

Terms and Conditions

Flexible Terms

Product Range/ Tenure

7 days to 1 year

Pre-Payment Penalties

Rs.49/Rs.99/Rs.149 (depending on loan amt.)

Processing Fee

Rs.49/Rs.99/Rs.149 (depending on loan amt.)

Documentation

Identity Proof, Address Proof (KYC Norms)

SOURCE: IIFL GOLD LOAN BRANCH

ADVANTAGES OF GOLD LOAN

Gold loan doesnt demand any certificate to show your salary or income and even no
credit card history is required. Thus even an unemployed and non-working people can go
for gold loan

Unlike any other unsecured loan, gold loan doesnt require many papers, only few
documents such as ID proof and Address proof is enough to avail a gold loan

One of the main advantages of gold loan is its low interest rates. Usually loan over gold is
provided at the interest of 12-16% per annum and this is quite low compared to personal
loans available at interest rates of 15-25% per annum

In rural areas, agricultural loan against gold is also available for agriculturist at a very
nominal rate of interest at 7% to 8%, proof of agriculture document needs to be provided

24

Gold loan is the most simple and convenient forms of loan because here all you need to
do is pledge your gold with a bank or finance company and get up to 75% of the market
value of the gold as loan

RBI GOLD LOAN REGULATIONS FOR NBFCS

The Reserve Bank Of India (RBI) tightened regulations governing Non Banking Finance
Companies (NBFCs) lending against gold jewellery

The new rules include strict documentation for high value loans against gold and
prohibition on misleading advertisement by NBFCs such as offering availability of gold
loans in a matter of 2-3 minutes

The amount that can be lent against gold has been maintained at 75%. This means for
gold worth Rs.100 offered as collateral, lenders can give loans up to Rs.75

Also NBFCs financing against the collateral of gold must insist on a copy of the PAN
card of the borrower for all transactions above Rs.5,00,000 and all the high value loans of
Rs.1,00,000 and above must only be disbursed by check

25

RBI has also asked NBFCs to make the auction process of the gold more transparent by
disclosing the details for auction process in the annual report, including full details of the
value fetched in the auction

The Reserve price for the pledged ornaments should not be less than 85% of the previous
30 day average closing price of 22 carat gold as declared by the Bombay Bullion
Association Ltd, an industry body.

HOW IS GOLD VALUATED AT IIFL GOLD LOAN BRANCH

Before using the touch stone, it should be cleaned & some drops of coconut oil have to be
applied over the surface evenly.

While checking the gold in touch stone, the rubbing should be done deeply & repeatedly
rubbing in the same place 8 to 10 times. The rubbing length should not exceed 2cms.

For knowing the quality of gold, we have to consider 3 points in rubbing.

a) Hardness
b) Blister
c) Color

While rubbing the gold, if the rubbing seems to be soft, it shows high percentage of gold
(88% to 91.60%).
26

Where rubbing seems to be hard, it may be below 83% purity.

When rubbing gold, if blister are found more it may be high percentage & it may look
like dim

When rubbing gold, if blister are not found, it may be low percentage & it may look like
bright. Then we have to find the color code of the rubbing.

But for confirming the percentage of gold, we have to use the nitric acid & sodium
chloride (salt).If we rub metal other than gold, while applying nitric acid, the rubbing will
disappear quickly.

If we rub the gold of 50% & below, while applying nitric acid, the rubbing will not
disappear quickly. Only color will change to reddish. After applying salt, the rubbing will
disappear & luster will form in that place.

27

GOLD LOAN BRANCH PROCESS

-

Customer Care Executive

Explains the various scheme.

If customer is convinced to pledge, collects KYC documents & gold.

Verification of KYC documents done & passed on to BM for further verification.

BM ID & Address Proof Verification.

Valuer 1

Confirms the count and gross weight.

Check gold for its purity.

Brief the customer about their requirement and other features.

Valuer 2

Confirms the purity by testing.

Passes the appraisal sheet to BM.

28

Branch Manager (BM)

Confirms the purity, loan amount & passes the same to CCE.

CCE At the same time, CCE and valuers does system entry. Signature of customer,
valuers & BM done in the loan docs. Paper passed on to Cashier.

Cashier

Disbursement of cash along with denomination noting in cash register.

ROLE OF STAFF ENGAGED IN THE PROCESS

Role of a Customer Care Executive:
Handling inquiries from customers regarding loans against gold.
Helping customer to solve his/her all queries.
Explaining terms and conditions of the product to the customer.
Ensuring all the KYC documents are verified with original.
Ensuring all the details are filled up in Customer Detail Form.
Role of Valuer 1 & 2:
Checking the jewellery with accuracy
Testing gold with two methods which include, Skin Test & Salt Test.
Finding out the purity & making appraisal sheet.
Working out on loan amount with mutual conversation.
29

 Every gold jewellery item must be counted and matched with the appraisal sheet before
inserting it in gold packet.
Each & every details mention on packet must be filled in with accuracy.
It is important to keep gold packet in serial order in vault.
Role of Cashier:
To make sure that cash is taken from vault strictly as per cash denomination entered in
the system.
Ensuring that cash is counted twice before giving it to customer.
To make sure that cash transaction is done in front of CCTV camera.

Role of Branch Manager:

Branch Manager has to explain customer about RTGS process.
Convince customer to opt for RTGS/NEFT mode of cash transfer.
Explain customer about the advantages of RTGS/NEFT process.
Make sure that address verification is done by BM before disbursal of loan.

30

COMPETITIORS

MUTHOOT FINANCE GOLD LOAN:

Muthoot is a Kerala originated association set up by Muthoot Ninan Mathai in 1887 at
Kozhencherry in Travancore district which was later being adopted by M. George Muthoot. Loan
is received within a time period of 5 min. The loan amount ranges from Rs.1500 to Rs.1 crore ,
0% processing fees, Interest rate of 1% per month.
MANNAPURAM FINANCE GOLD LOAN:
Mannapuram Finance also facilitates gold loan within 5 mins. It helps to draw instant
Cash by subscribing gold ornaments and jewellery. It provides loan at higher points, based on
purity, net weight of gold. The candidate must have one recent ID- Voter ID/ Ration Card/
Driving License/ Passport. No time-consuming formalities required.
31

UNION GOLD LOAN:

Union gold loan provides credit facility to needy farmers. The lending rate is Rs.1,800
per gram gold ornaments. Under non- priority sector for basic necessities for unforeseen
expenses. Loan amount consumption is up to Rs.2,000. The maximum loan amount is
Rs.5,00,000.
HDFC GOLD LOAN:
HDFC Gold loan term loan provides instant loans. Regular interest on loan is being
granted. Identity Proof like Passport/ Voters ID/ Adhar Card along with proof like Ration Card/
Telephone bill and 2 passport size photographs are also required.
SBI GOLD LOAN:
SBI gold loan is loan which satisfies as a biggest advantage to overcome crisis and is a
personal loan phenomena. It has low interest rates. The loan amount of Rs.10,00,000 can be
attained by the customer. It also provides gold loan for farmers for agricultural necessities

NBFC MARKETING
We define NBFC marketing as follows: NBFC marketing is the aggregate of functions,
directed at providing services to satisfy customers financial (and other related) needs and wants,
more effectively and efficiently that the competitors keeping in view the organizational
objectives of the NBFC. NBFCs marketing activity. This aggregate of functions is the sum total
of all individual activities consisting of an integrated effort to discover, create, arouse and satisfy
customer needs. This means, without exception, that each individual working in the NBFC is a
marketing person who contributes to the total satisfaction to customers and the NBFC should
ultimately develop customer orientation among all the personnel of the NBFC. Different
Marketing helps in achieving the organizational objectives of the NBFC. Indian NBFCs have
duel organizational objective commercial objective to make profit and social objective which is
a developmental role, particularly in the rural area.

32

Marketing concept is essentially about the following few thing which contribute towards
NBFCs success:
1)

The NBFC cannot exist without the customers.

2)

The purpose of the NBFC is to create, win, and keep a customer.

3)

The customer is and should be the central focus of everything the NBFCs does.

4)

It is also a way of organizing the NBFC. The starting point for organizational design
should be the customer and the NBFC should ensure that the services are performed and
delivered in the most effective way. Ultimate aim of a NBFC is to deliver total
satisfaction to the customer.

5)

Customer satisfaction is affected by the performance of all the personal of the NBFC.

All the techniques and strategies of marketing are used so that ultimately they induce the
people to do business with a particular NBFC. Marketing is an organizational philosophy. This
philosophy demands the satisfaction of customers needs as the pre-requisite for the existence and
survival of the NBFC. The first and most important step in applying the marketing concept is to
have a whole hearted commitment to customer orientation by all the employees.

Marketing is an attitude of mind. This means that the central focus of all the activities of
a NBFC is customer. Marketing is not a separate function for NBFCs. The marketing function in
Indian NBFC is required to be integrated with operation.
Marketing is much more than just advertising and promotion; it is a basic part of total
business operation. What is required for the NBFC is the market orientation and customer
consciousness among all the personal of the NBFC. For developing marketing philosophy and
marketing culture, a NBFC may require a marketing coordinator or integrator at the head office
reporting directly to the Chief Executive for effective coordination of different functions, such as
marketed research, training, public relations, advertising, and business development, to ensure
customer satisfaction. Hence, the total marketing function involves the following:

33

a)

Market research-

i.e.

identification

of

customers

financial needs and wants and forecasting and researching

future financial market needs and competitors activities.
b)

Product Development-

i.e. appropriate products to

meet consumers financial needs.

c)

Pricing of the service-

i.e.,

promotional

activities

and distribution system in accordance with the guidelines

and rules of the Reserve NBFC of India and at the same
time looking for opportunities to satisfy the customers
better.
Thus, it is important to recognize the fundamentally different functions that NBFC marketing
has to perform. Since the NBFCs have to attract deposits and attract users of funds and other
services, marketing problems are more complex in NBFCs than in other commercial concerns.

ALL PRODUCTS OF IIFL FINANCE LTD.

Mutual Funds
A mutual fund is a company that pools the money of many investors to invest in a variety
of different securities. Investments may be in stocks, bonds, money market securities or
some combination of these. Those securities are professionally managed on behalf of the
shareholders, and each investor holds a pro rata share of the portfolio entitled to any
profits when the securities are sold, but subject to any losses in value as well.

34

For the individual investor, mutual funds provide the benefit of having someone else
manage your investments and diversify your money over many different securities that
may not be available or affordable to you otherwise. Today, minimum investment
requirements on many funds are low enough that even the smallest investor can get
started in mutual funds.
A mutual fund, by its very nature, is diversified its assets are invested in many different
securities. Beyond that, there are many different types of mutual funds with different
objectives and levels of growth potential, furthering your chances to diversify.

Loan against Property

Need cash for business, childrens education, marriage or any personal use? Have some
property in your family or in your name? Would like to leverage your property without
giving it on rent or selling it?
IIFL brings to you Loan against property (LAP). You can now take a loan against your
residential or commercial property, to expand your business, plan a dream wedding, and
fund your childs education and much more.
You can now depend on us to meet your entire business requirement even to purchase a
new shop or office for your business.

Home Loan:
A new home brings with it new hopes, joys and emotions. At IIFL, we have shared new
hopes, joys and emotions with our customers. Every customer has a specific and unique
concern and our home loan product is customized to provide you solutions for your
unique concern. IIFL group has set up India Infoline Housing Finance Ltd. (IIHFL) to
offer highly customized facilities of availing Home Loans.

35

We believe that in order to succeed, we need to offer not only competitive products, but
also the best possible service and value-added features and benefits. In a market where
the basic product is largely similar, the differentiator is our ability to understand the
customer's need completely and structure the value-adds appropriately.

Wealth Management:

The key to achieving a successful Investment Portfolio is to have a carefully planned

financial strategy based on a thorough understanding of the client's investment needs and
risk appetite.
The IIFL Private Wealth Management Team of financial experts will recommend an
appropriate financial strategy to effectively meet your investment requirements.

Equity Research:
IIFL special research cell where some of India's finest financial analysts bring you
intensive research reports on how the stock market is faring, when is the right time to
Invest when to execute your order and more. IIFL make sure that investors are always
prepared to make own investment decision when the opportunity arises. IIFL bring you
intensive research reports - whether sectoral or company-wise or more - that tell you
exactly when and where to invest. So whenever there is an exciting investment
opportunity, you are in the know and always ready to invest.

IIFL Health Care:

Healthcare Finance is a business vertical dedicated at offering a customized financial

solutions to Doctor, Diagnostics Centre, Hospitals, Nursing home etc for their funding
needs.
36

With 1.2 beds per 1000 population there is immense growth potential in this segment.
Growing incomes, literacy and awareness bode well for the Indian healthcare services
market. Considering that 80% of future Investment in Healthcare is expected to come
from Pvt Sector, we at IIFL see a lot of synergies between the Healthcare fraternity and
IIFL for mutual growth opportunities.
IIFL is extremely delighted to share that we are present in Healthcare Finance
Business.

National Pension Scheme:

National Pension System (NPS) is an initiative of Pension Fund Regulatory and
Development Authority (PFRDA), the apex body established by the Government of India
to regulate and develop the pension sector in India. NPS-Lite Model is designed to
ensure ultra-low administrative and transactional costs, so as to make investments of
smaller size possible.
Features of NPS Lite Scheme:

Professional fund management

Entry age for joining NPS Lite- Swavalamban is 18-60 years.

Flexibility to decide your retirement age

If retirement is opted for at the age of 60 then up to 60% of accumulated corpus can be
withdrawn

RESEARCH METHODOLGY

37

The study is based on survey technique. The study consists of analysis and Market Scoping
of Financial product of IIFL. For the purpose of the study 25 Customers are picked up and their
views solicited on different parameters. The methodology adopted includes.

Questionnaire

Random Sample Survey of Customers

Discussions with the concerned.

SOURCES OF DATA:

Primary Data: Questionnaire

Secondary Data: Published articles in newspaper, journals, magazines

SAMPLING PLAN:

Population: (Universe) Customers of IIFL

Sampling Size: A sample of 50 was chosen for the purpose of study

Sampling Methods: Non Probability Sampling

Sampling Procedure: Random Sampling Technique

Field Study: Directly approached respondents

OPERATIONAL LEARNING

38

Q) HOW MANY TIMES IN A YEAR YOU HAVE EMERGENCY REQUIREMENT OF

MONEY?

a) 1 times b) 2 times c) 3 times d) 4 times e) 5 times f) 6 times

Emergency Requirement of Money

2%
24%
1 times

2 times

3 times

24%

36%
4 times

5 times

6 times

14%

Here we can see that maximum number of clients i.e., 18 clients have emergency of
money only 1 time a year.

Q) How do you manage when you require money?

39

a) Relatives b) Friends c) Loan d) Savings

How is the Money Managed?

13%
Relatives

24%

Friends

Loan

Savings

34%
29%

Here, we can see that maximum number of clients, i.e. 9 clients have managed to get
money from Relatives.

Q) Are you aware about the concept of Gold Loan?

40

a) Yes

b) No

Are you aware about Gold Loan?

20%
Yes

No

80%

Here, we can see that the maximum number of clients that is 80% are aware of the
concept of gold loan while in other hand only 20% are not aware about the concept of gold loan.

Q) Have you ever used Gold Loan Services?

41

a) Yes

b) No

Have You Ever Used Gold Loan Services

34%

Yes

No

66%

Here, we can see that maximum number of clients that is 66% hasnt used gold loan
services and 34% of clients have used gold loan services.

42

Q) If Yes Which Company?

a) Abudaya Co-Op Bank b) Bait-Un-Nasr c) Muthoot Finance d) IDBI Bank

If Yes Which Company

6%
13%
Abudaya

Bait-Un-Nasar

38%

25%
Muthoot

HDFC

IDBI

19%

Here, we can see that maximum number of clients that is 37% have taken a loan from
Muthoot Finance Limited and so on.

43

Q) What according to you is the safest instrument of Investment And Saving?

a) Bank Savings Ac b) Insurance c) Real Estate d) Stocks and shares e)Fixed deposits f)
Post Office

Safest Form Of Investment

19%
Banks Savings Ac

Insurance

Real Estate
5%

Stocks And Shares

Fixed Deposit

Post Office

53%
12%
10%

Here, we can see that maximum number of clients that is 53% think that Bank Savings
Account as the safest form of investment and 20% think that fixed deposits are the safest form
and so on.

44

Q) What is your approximately Monthly Household Expenses?

1) >10,000 2) up to 15,000 3) up to 20,000 4) up to 25,000 5) above 30,000

Monthly Household Expenses

14%
>10,000

up to 15,000

2% 8%

up to 20,000

up to 25,000

above 30,000

28%

48%

Here, we can see that maximum number of clients monthly household expenses is up to
Rs.25, 000 that is 48%, and 28% of clients monthly expenses is up to Rs. 20, 000 and so on.

45

Q) Do you have your own house or a rented one?

1) Owned

2) Rented

House- Owned Or Rented

26%
Owned

Rented

74%

Here we can see that 74% of clients houses are owned and 26% of clients houses are
rented.

46

Q) Have you taken any housing loan?

1) Yes

2) No

Have you taken a Housing Loan?

34%

Yes

No

66%

Here you can see that 66% of clients havent taken any Housing loan and only 34% of
clients have taken Housing loan.

47

Q) Have you made any provision for your Retirement?

1) Yes

2) No

Have You Made any provision for your Retirement?

Yes

No
48%

52%

Here you can see that 52% of clients have made provision for their Retirement and 48%
have not made any provision for their Retirement

48

LIMITATIONS

Time limit is a major constraint

This research reflects on individual customer in Bandra West only. So findings and
suggestions is given on the basis of this research cannot be extrapolated to the entire
population.

Sample Size of the Questionnaire is 50 which is very small and which is not enough to
study the awareness of consumer of that particular above area.

Respondents are not very sincere and care full to fill up the questionnaire so we cannot
find the right solution.

As per the company rules many information was not declared.

49

FINDINGS

According to the survey most of the customers of INDIA INFOLINE FINANCE

LIMITED says that the rate they charge is satisfactory.

Among all the respondents 80% are aware about different financial services provided by
IIFL and remaining 20% are not aware about the same.

IIFL Gold loan services is less preferred in the area of Bandra because they have less
awareness about their products and services

People want to invest their money in the bank savings account rather than insurance,
fixed deposits, or stocks and shares.

Most respondents have their annual income between Rs. 2 lakhs and Rs. 4 lakhs and from
them most of the people prefer for Bank Savings Account.

50

RECOMMENDATIONS AND SUGGESTIONS

Most of the people are not much aware of IIFL gold loan services and its benefit. So
INDIA INFOLINE FINANCIAL LIMITED can take general awareness of GOLD LOAN
SERVICES plan to the customers. INDIA INFOLINE should also maintain a customer
satisfaction standard.

There is a lack of new customer addition in the branches of IIFL, only existing
customers come to the respective branches for gold loan, so it is important to increase the
awareness about the financial products of IIFL in the respective area. Promotional activities
should be held for getting in more customers.

The company should increase their Exposure. It is the good tool to capture the market. To
increase awareness about GOLD LOAN SERVICES AND OTHER FINANICAL PRODUCTS,
and the name of the company itself, the company should organize campaign.

Marketing of their products should be done on a regular basis. Advertisements is the best
tool for customer addition.

51

CONCLUSIONS

On the basis of the study it is found that India Infoline Ltd is a better service provider
than other NBFCs because of their good service and personalized advice on gold loan and
financial investment product.

IIFL provides the faster services as well as relationship manager facility for
encouragement and protects the interest of the investors. It also provides the information through
the internet and mobile alerts.

Study also concludes that people are not much aware the benefits of taking gold loan and
IIFL gold loan services.

The company should also organize seminars and similar activities to enhance the
knowledge of prospective and existing customer, so that they feel more comfortable while
investing in the financial products

52

BIBLOGRAPHY

www.indiainfoline.com

http://www.iiflfinance.com/Products/Goldloan.aspx

http://www.neytri.com/gold-loans-what-you-must-know/

http://indiainfolinegoldloan.blogspot.in/2011/10/gold-loan-schemes.html/

http://www.muthootfinance.com/services/gold-loan.html

http://www.agloc.org/

www.mutualfundsindia.com

India Infoline Finance Limited Annual Report 2014

53