With strong demand, Nabil Bank is all set to expand its ‘Instant Gold Loan’ scheme to more branches.
Since the last three months, the bank has been offering instant gold loans that can be processed within an hour. Gold loans are currently available at branches in Kumaripati, Kalimati, Khichapokhari, Mangalbazar, and Suryabinayak within the Kathmandu Valley, as well as at Mahendrapath in Dharan, Chauraha in Butwal, Bhanubhakta Chowk in Nepalgunj, Phidim in Panchthar, and Chipledhunga in Pokhara.
Chadani Shrestha, head of retail lending at the Nabil Bank noted that the bank plans to expand this service to 18 branches due to strong customer demand. Since its launch three months ago, the gold loan scheme has seen a remarkable response, with disbursements doubling and total loan amounts exceeding Rs 1 billion.
“The newly launched “Instant Gold Loan” scheme enables customers to secure loans quickly and effortlessly,” said Shrestha.
Shrestha explained, “At designated branches, we have set up systems to evaluate gold. Customers can deposit their gold and receive a loan in under an hour. However, those without a bank account will need to open one, which may extend the process.”
Under this scheme, customers can pledge gold or jewelry to obtain loans, with the bank offering up to 70 percent of the gold's market value. The maximum loan amount available is Rs 5 million. The bank’s interest rate is set at the base rate plus a 3 percent premium, translating to approximately 10 percent per annum based on the current base rate. This rate may decrease as the base rate rises.
In Nepali society, gold and silver serve as both adornments and savings, easily convertible to cash during financial difficulties.
Many individuals invest in gold as a form of saving, using it as collateral for loans when needed. Banks view gold as a secure asset comparable to cash, leading to increased investment in gold loans.
As people transition from pawn shops to banks for gold-backed loans, they are drawn to the quicker processes and lower interest rates offered by financial institutions. Consequently, gold and silver mortgage loans are becoming increasingly popular among the general public.
