gold loan as a short term finance

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A
Summer Training project report
On
Customer Perception about Gold Loan as Short Term of Finance
AT
Submitted by:
KEYUR M UPADHYAY
Enrollment No: 167610592051
M.B.A - SEM-II
Batch: 2016-2018
SUBMITTED TO
SHREE SAHAJANAND INSTITUTE OF MANAGEMENT
BHAVNAGAR
(AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY)

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Declaration
I, undersigned hereby, declare that the research project assigned to us in MBA, under
the guidance of professor, written and submitted by us as our original work.
The empirical findings and analysis in this project are based on the primary as well as
secondary data collected by us. We have not duplicated any material or data either from
any source of data collection from any visited firm.
Hereby declare project reported titled ,” Customer Perception about Gold Loan as
Short Term of Finance " Is a part of curriculum and data used in this project will
remain confidential.
Place: BHAVNAGAR
Date:
Keyur Upadhyay
(167610592051)

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Certificate
It is a certified that the work presented in this report entitled “Customer Perception
about Gold Loan as Short Term of Finance “has been carried out for partial
fulfillment of curriculum for the degree of master of business administration.
We further certified that this report has not been submitted elsewhere foe a degree. The
information obtained from various sources to present the report has been summarized
and acknowledgement.
Keyur Upadhyay
Counter signed by
Mr. Birju Jani
Assistant professor

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Executive Summery
Management as a profession cannot be taught merely in four walls of the classrooms.
Only theoretical knowledge is not sufficient to build competitive managers. Practically
knowledge of the business environment is equally important.
In today business world service sector is running towards its booming stage. So I
choose service industry for my training session in M.B.A.
I choose kotak Mahindra bank as Effectiveness of customer satisfaction service in
private bank who entered the market before few years and made its own place among
all its competitors.
Service is the company‟s ability to fulfill the physical, emotional and physiological needs
of its customers. Service is supremely important in an organization because it is what
productivity depends on. If your service is good for your customer then it will be come
up with time and changing market conditions. The project centers the research titled
Customer Perception about Gold Loan as Short Term of Finance survey at the
kotak Mahindra bank.
To accomplish the task, a survey was carried in and around kotak Mahindra bank with a
sample of respondents taken on random basis approaching the customers. A structured
questionnaire was prepared and administrated and the data so collected was analyzed
by percentage and methods.

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Preface
Summer training is in an integral part of master of business administrative program. The
main objective of summer training is to work in the organization for a stipulated period
and gain the valuable knowledge of management skills so that the student can learn
how to work as a team instead of individual and how to handle critical situations in the
business.
The knowledge gained by reading the books is just theoretical in nature. Summer
training is an opportunity to every student to learn practical aspects, a part from
academic knowledge. As a practical point of view, I completed my summer training in
kotak Mahindra bank, Bhavnagar which gave me the practical knowledge of customer
satisfaction service on private bank and also aspects of management.
I learn a lot from this training about the corporate life, which will be useful further in my
professional life.

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Acknowledgement
We learn management “manage +men+ T(time , task etc).” we all agree with this
statement and wish to include that it would have been not possible to complete this
project without help and support of many people. we are thankful to all of them.
It gives my immeasurable pleasure, to knowledge the help and advice given by all the
concern people.
It is matter of great pleasure for me to get this opportunity of expressing our deep and
sincere of gratitude to all the faculties of the SHREE SAHAJAND INSTITUTE OF
MANAGEMENT (center for management studies) and Gujarat technological university
for this guidance and generous support that give me sufficient strength to prepare this
summer internship project report.
I greatful to SHREE SAHAJANNAD INSTITITUE OF MANAGEMENT for granting to
prepare this report and special thanks to Mr. Birju Jani (Assistant professor) for timely
help and inspiring guidance without which we would not have successfully completed
this report.
Last but not the least I am indebted to my parents and all of my well wishers, who
provide me their time, support and inspiration needed to prepare this report.

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Table of contents
Topics Page no
Declaration 2
Preface 3
Acknowledgement 4
Executive summery 5
Company overview 8 -16
Gold information 18-34
Research problem 36
Literature review 37-38
Research objective 39
Hypothesis statement 40
Research methodology 41
Data analysis and interpretation 42-67
Hypothesis testing 68-72
Research findings 73
Recommendation 74
Limitation of study 75
Conclusion 76
Bibliography 77
Questionnaire 81

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Board of directors
1.1
Uday kotak
Founder & MD & vice executive chairman
Dipak Gupta
Joint MD
Jaimin Bhatt
President & Group CFO
Shanti Ekambaram
President - consumer Banking
KVS Manian
President - Corporate, Investment &
Institutional Banking
Mohan Shenoi
Chief operating officer
Gaurang Shah
President – Asset management insurance &
international business
D kannan
Group head – commercial banking

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KOTAK MAHINDRA BANK SUCCESS STORY
 Established in 1985, the Kotak Mahindra group has been one of India's most
reputed financial conglomerates. In February 2003, Kotak Mahindra Finance Ltd,
the group's flagship company was given the license to carry on banking business
by the Reserve Bank of India (RBI). This approval created banking history since
Kotak Mahindra Finance Ltd. is the first non–banking finance company in India to
convert itself in to a bank as Kotak Mahindra Bank Ltd. Today, the bank is one of
the fastest growing bank and among the most admired financial institutions in
India.
 The bank has over 323 branches and a customer account base of over 2.7
million. Spread all over India, not just in the metros but in Tier II cities and rural
India as well, it is redefining the reach and power of banking. Presently it is
engaged in commercial banking, stock broking, mutual funds, life insurance and
investment banking. It caters to the financial needs of individuals and corporate.
The bank has an international presence through its subsidiaries with offices in
London, New York, Dubai, Mauritius, San Francisco and Singapore that
specialize in providing services to overseas investors seeking to invest into
India.
 In a study by Brand Finance Banking 500, published in February 2014 by the
Banker magazine (from The Financial Times Stable), KMBL was ranked 245th
among the world's top 500 banks with brand valuation of around half a billion
dollars ($481 million) and brand rating of AA+.and merge with ING Vysya bank in
2015.

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 Merger with ING Vysya Bank
2014, Kotak Bank acquired ING Vysya Bank in a deal valued at ₹15,000 Cr
(US$2.3 billion). With the merger, total employment will jump to almost 40,000, and the
count of branches reached 1261.Post the merger, ING Group, which controlled ING
Vysya Bank, will own a 7% share in Kotak Mahindra Bank.

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Products and Services
The bank offers complete financial solutions for infinite needs of all individual and
non–individual customers depending on the customer's need – delivered through
a state of the art technology platform. Investment products like Mutual Funds,
Life Insurance, retailing of gold coins and bars etc are also offered. The bank
follows a mix of both open and closed architecture for distribution of the
investment products. All this is backed by strong, in–house research on Mutual
Funds.
The bank‟s savings account goes beyond the traditional role of savings, and
allows us to put aside a lot more than just money. The worry–free feature of
Savings Account provides a range of services from funds transfer, bill payments,
2–way sweep through our ActivMoney feature and much more. We can place
standing instructions for investment options that can be booked through Internet
or through Phone banking services. The Savings Account thus provides for
attractive returns earned through a comprehensive suite products and services
that offer investment options, all delivered seamlessly to the customer by well
integrated technology platforms.
Apart from Phone banking and Internet banking, the Bank offers convenient
banking facility through Mobile banking, SMS services, Netc@rd, Home banking
and BillPay facility among others.
The Depository services offered by the Bank allows the customers to hold equity
shares, government securities, bonds and other securities in electronic or Demat
forms.
The Salary 2 Wealth offering provides comprehensive administrative solutions for
Corporates with features such as easy and automated web based salary upload
process thereby eliminating the paper work involved in the process, a dedicated
relationship manager to service the corporate account, customized promotions
and tie – ups and many such unique features. The whole gamut of investment

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products and investment advisory services is available to the salary account
holders as well.
For the business community, the bank offer comprehensive business solutions
that include the Current Account, Trade Services, Cash Management Service
and Credit Facilities. The bank‟s wholesale banking products offer business
banking solutions for long–term investments and working capital needs, advice
on mergers and acquisitions and equipment financing. To meet special needs of
the rural market, the bank has dedicated business offerings for agricultural
financing and infrastructure. Its Agriculture Finance division delivers customised
products for capital financing and equipment financing needs of our rural
customers.
For financial liquidity the bank offers loans that meet personal requirements with
quick approval and flexible payment options. To complete the personal financial
offerings space, the bank now offers Kotak Credit Card which is a hassle–free,
transparent product that also happens to be the first vertical credit card in the
industry.

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Awards
ICAI Award –: Excellence in Financial Reporting under Category 1 – Banking Sector
for the year ending 31st March, 2010
Asia money –: Best Local Cash Management Bank 2010
IDG India – Kotak won the CIO 100 'The Agile 100' award 2010
IDRBT
Banking Technology Excellence Awards Best Bank Award in IT Framework and
Governance Among Other Banks' – 2009
Banking Technology Award for IT Governance and Value Delivery, 2008
IR Global Rankings – Best Corporate Governance Practices – Ranked among the
top 5 companies in Asia Pacific, 2009
Finance Asia – Best Private Bank in India, for Wealth Management business, 2009
Kotak Royal Signature Credit Card – Was chosen 'Product of the Year' in a
survey conducted by Nielsen in 2009
IBA Banking Technology Awards
Best Customer Relationship Achievement – Winner 2008 & 2009
Best overall winner, 2007
Best IT Team of the Year, 4 years in a row from 2006 to 2009
Best IT Security Policies & Practices, 2007
Euro money – Best Private Banking Services (overall), 2009

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Emerson Uptime Champion Awards – Technology Senate Emerson Uptime
Championship Award in the BFSI category, 2008
2010
Best Investment Bank in India, 2010
Best Equity House in India, 2010
Best Broker in India, 2010
Best Domestic Equity House, 2010
Best Local Brokerage in the Asia money Brokers Poll – 2010
Best Investment Bank in India, 2010
Best Bank for Equity Finance in India, 2010
Best Domestic Investment Bank, 2010
Best Investment Bank in India, 2006, 2007, 2008, 2009 & 2010
Best Equity House in India, 2008 & 2010
Best Domestic Equity House, 2008, 2009 & 2010
Kotak Mahindra Bank has launched a credit card called Kotak Trump Card that offers
10% cash back on dining as well as movie and play spends.
2011 : Kotak Mahindra Bank launches interbank mobile payment service
Milestones
1986 – Kotak Mahindra Finance Ltd started the activity of Bill Discounting
1987 – Kotak Mahindra Finance Ltd entered the Lease and Hire Purchase
market
2003 – Kotak Mahindra Finance Ltd. converted into a commercial bank – the first
Indian company to do so.
2009 – Kotak Mahindra Bank Ltd. opened a representative office in Dubai.
Entered Ahmedabad Commodity Exchange as anchor investor.

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company profile
Type Public company
Treaded as BSE: 500247
NSE: kotak bank
Industry Banking
financial service
Founded 1965
(As kotak Mahindra finance ltd)
Headquarters Mumbai, India
Key people
Uday kotak
Dipak gupta
Jaimin bhatt
shanti Ekambaram
KVS manian
Mohan Shenoi
Gaurang
D kannan
Arvind kathpalia

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Products
 Deposit accounts
 Loans
 Investment services
Revenue $ 4.3 billion (2016)
Net income $ 530 million (2016)
Total assets $ 5.8 billion (2015)
Web-site www.kotak.com

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Vision Statement
To be the most trusted global finance services brand and the most preferred financial
services employer with focus on creating value.

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Organization Structure
Chief executive officer
Chief operation officer
Co-chief executive officer
Head marketing
Head-business Department
Head –institutional sales
Co-head –retail sales and Distribution

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What is Gold Loan?
As the name suggests this is the loan given against gold. Many nationalized banks,
private banks and other financial companies offer this loan at attractive rates. Many go
for this loan for short period to meet the requirement of their children‟s education,
marriage and other financial problems in the family. And others think that instead of
keeping the gold idle at home or locker, loan against gold is the best option. Moreover
with the rise in gold rates the demand from companies and banks offering such loans
has raised. For instance.
A Gold Loan is a secured Loan taken by depositing gold as collateral So far, the
Gold Loan market was dominated by non-banking finance companies, but
gradually Organized banks have also started entering the business thereby giving
a clear indication of its viability as an effective Loan product A Borrower is a
person who takes a Loan from the Loan lender The Gold Loan market in India is
broadly classified into two categories, namely Organised Sector and Unorganized
sector Organized sector primarily constitutes formal institutions like banks and

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NBFCs; Unorganised sector includes informal institutions like private money
lender and pawn broker However, the market shares between the Unorganized
and the Organised sector is extremely skewed.
Types of gold
1) Colored gold
Gold can take different colors depending on the metals it is mixed with. The
different gold hues are generally for the purpose of jewelry. To give you a quick
idea here are some different types of gold colors and how they are made:
White Gold: For gold to take a white color, it must be mixed with a white
metal such as nickel, manganese or palladium. Standard White gold is
usually 14K of gold (58.5% purity) while the rest is divided as 21% copper,
7.84% zinc, and 12.73% nickel. and White gold can often be rhodium
plated to give it a more shiny and white appearance.
Rose, Pink, Red Gold: Gold can take these colors when mixed with
copper. The more copper in the alloy, the darker the tone of red that will
surface. A common rose gold alloy composition is 18K (75% gold) mixed
with 25% copper while a 50/50 mix of gold (12K) with copper results in
what we would call red gold.
Green Gold: Green gold, otherwise known as electrum, is a natural
forming alloy which combines gold and silver. The greenish color varies
depending on the exact mixture but back in the 73% gold, 27% silver
Blue Gold: 46% gold, 54% indium.
Purple Gold: 80% gold, 20% aluminum.
Black Gold: 75% gold, 25% cobalt.

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Types of gold bullions
Gold bars
Gold bullion coins
Other types of Gold
Numismatic Gold Coins
Unrefined Gold

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Advantages of Gold Loan
Gold loan doesn‟t demand any certificate to show your salary or income and
even no credit card history is required. Thus even unemployed and non working
people can go for gold loan.
 Unlike any other unsecured loan, gold loan doesn‟t require many papers, only
few documents such as ID proof and address proof is enough to avail for such
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 15-26% per annum.
 In rural areas Agricultural loan against gold is also available for agriculturist at
very nominal rate of Interest of 7%-8%, proof of agricultural document needs to
be provided
 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 upto
80% of the market value of the gold as a loan.
 Borrower will be given an option to pay only interest during the entire term and at
the end of the tenure you can pay complete borrowed amount in single shot.
 In case of gold loan processing time is very less. Usually banks take just few
hours to complete the process where as in case of NBFC‟s (Non Banking
Financial Companies) a few minutes is enough for the same. So for immediate
financial help this is the best option.

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Charges associated with Gold Loan
Loan processing charge: While some of the service providers may waiver
these charges, some banks do charge a processing fee.
Valuation Charge: These are the charges to be paid to the valuator. These
charges are also specific to the service provider and those having in-house
valuators do not charge any extra amount for valuation.
Late payment penalty: Most of the service providers charge late payment
penalty and this too can vary from one institution to the other.
Pre-payment penalty: Most of the service providers do not charge a penalty for
repayment before the loan tenure is over. But some may still have this charge in
place.
It is advisable to check with the loan provider before taking the loan. These
charges could change the amount that you may finally receive.

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Advice on Gold Loans
Go for gold loan if you are confident of returning the money in time otherwise,
you will be penalized and all your pledged gold will come under the control of
bank or finance company.
While opting for gold loan check the interest rates in various banks and private
finances. If you go for private lenders then better to go with one who has been in
this business for many years.
As far as you are not emotionally linked to your gold ornaments this is the best
option. However nothing like this can help you during your difficulties and with the
fall of dollars and euro many think gold is the only safe thing left.

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Documents required for Gold Loan
Identity proof such as passport, voters ID or driving license.
Address proof such as electricity bill, ration card, telephone bill etc.
For signature proof you need to submit your passport copy, driving license or any
other document with your sign.
2 passport size photographs.
Some of the leading companies and banks offering gold are ICICI bank, Muthoot
Finance, Manappuram Gold Loan, SBI and HDFC, kotak Mahindra bank.

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Gold loan as Follows
o Gold loan is a secured loan
o Eligibility : Anyone at any Age with gold as collateral is eligible.
o Documentation : Quick Loan approval sand disbursals, with minimal
documentation.
o Loan to value: Multitude of Loan options with higher LTVs.
o Non-bankable customers are also served
o Convenient hours of operation
o Better operating cost structure vies-à-versa bank.
o Flexibility in provision of very small and very large Loan amounts
India is one of the biggest markets for gold and Gold Loan According to
World Gold Council, India accounts for 10 of total world gold stock, of
which rural India accounts for 65 of the total gold stock2 For Indians,
gold is not just a commodity, but an auspicious metal that they buy for
various purposes on different occasions.
Increased Hedging with futures - Factors
• Gold Future Rate - a Bench mark Rate - increases Hedge effectiveness
• Hedging awareness Seminars by Regulators-Exchanges-Members
• Regulatory Enablers
– Income Tax Amendment - Futures Trading treated as business income
and not Speculative income
– Guidance note on Derivative accounting – No net impact in the statement
of profit and loss under hedge accounting

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– Disclosure requirement for listed company to disclose commodity price
risk on and hedging activities in the annual report Adequate position
limits.

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Kotak commodities: Gold hedging with futures –
Challenges
• Hedging for profit mentality
• Perception - Commodity hedging vs currency hedging
• High cost of hedging - CTT
• Except futures no other product available
• No Liquidity in long dated contracts
• Daily MTM – onerous operational process
• Hedging Data disclosure still at an initial stage

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Customer perception about gold loan
Women perception
Kotak has a huge holding of gold in the private sector, but they feel that it is still a very
small percentage. They have about 65 tons of gold in custody and expect that more
could be put to productive purpose if the awareness and benefits of Gold loan is spread.
Muthoot Smart Plus Gold Loan They have been actively involved in campaigns to
spread message regarding the financial potential of gold holdings with individual
consumers in India. “There is traditional perception that to avail of a gold loan is a
desperate measure. The truth is quite the contrary, and by availing of a gold loan, one
can change the profile of gold holdings from an idle asset to a productive asset”, says
TMG managing director George Alexander Muthoot. Their efforts show the house-wives
what the family‟s gold holdings can achieve for their husband‟s business. The group‟s
recently-launched gold loans at an interest rate of 1% a month offered had been well
received in the market, prompting even those who had not previously considered taking
a gold loan to avail of the scheme. Muthoot said many also realized how gold loans
could work out cheaper than personal loans and loans on credit card accounts. What is
Gold Loan? To start with let us define the term gold loan. It is nothing but a loan which
one can take from someone against gold. This gold can be in the form of bars or in the
form of coins or in the form of jewelry. Just imagine a scenario where you have enough
gold jewelry stored in your house and you are looking for some quick money. So, what
can you do in that scenario? Will selling the gold off be a good idea? The answer is a
big „no‟. In this scenario, one can go for gold loans. You can borrow some money from a
person keeping the gold jewelry with him and when you have enough money in your
own hand, you can take back the jewelry after paying back the loan to the person. This
way, you will neither lose the jewelry nor be suffering from the problem of the need of
instant money. Gold Loan Is For Whom – The Kings or Beggars? We always have a
perception that gold symbolizes prosperity and loan is for the poor. So, how can these
two words „gold‟ and „loan‟ come side by side to form a phrase gold loan? If you think

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you are someone who has no or little idea about the answer to the asked question, then
you must read on this article to have a good idea about gold loan. Why to options for
Gold Loan? Now that you know how to get a gold loan, you must spend some time
knowing why it‟s a good bet to opt for gold loans. Firstly, gold loans are one of the most
secured loans. Secondly, one can use the loan taken against gold to fulfill any purpose.
So, he or she does not get constrained by the purpose of the loan in this case. As far as
the interest rate is concerned, the banks are charging an interest of twelve and a half
percent annually while the non-banking organizations are charging at a rate of around
two percent monthly. These rates are at par with the rates involved with the other types
of loans. So, gold loans are good in this aspect as well.

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Gold Monetization-
Are We Willing To Part With Our Gold?
Last week, Narendra Modi launched three ambitious schemes - Gold Monetization
Scheme (GMS), Sovereign Gold Bonds Scheme and the Indian gold coin.
Since the announcement of these schemes in the budget, there has been a lot of buzz
around their success. After all this is not the first time a gold related scheme has been
launched.
Our fascination with gold goes way back into history. India has a rich tradition of gold
consumption and production.
Presently, India is ahead of China as world‟s largest consumer of gold in the world.
Cherished as both an adornment and an investment, Indian households own
approximately 22,000 tones of gold.
According to the GMS scheme, investors can deposit physical gold with banks and earn
interest on it. The interest can be earned in gold as well as cash terms.
The minimum quantity of gold that a customer can bring is set at as low as 30 grams,
encouraging even smaller investors.

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Customer’s perception toward gold loans
Customer plays a crucial role in the success/failure of business. Customer
perception and satisfaction towards a product produced by the company is an
ultimate target of the companies in present days. Even if the product may be either a
tangible (physical appearance) or an intangible (service oriented), the companies are
concentrating to convince and satisfy the customers to develop their business with
their products. In this research, the researcher is trying to evaluate the differences in
the customer perception between private/public banks and Non Banking Financial
Services (NBFCs). The primary data for this research has been taken from the
geographical region of Khammam district and its nearby towns. 200 Gold Loan
beneficiaries in an equal ratio of customers towards banks and NBFCs were taken.

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CONSUMER ATTITUDE AND PERCEPTION
TOWARDS GOLD LOAN
Gold Loan Market in India is well organized gold loan market has grown tremendously
over a period of time, thanks to the changing consumer perception about gold loan, and
rising loan requirements. A new trend of gold financing for purchasing has also been
observed in the industry. The main objective of the study is that to study the
demographic and socio-economic status of the gold loan borrowers in the study region
and to measures the loan borrowers level of satisfaction towards jewel loans offered by
Scheduled Commercial Banks in India.
Customer Attitude about gold loan
According to a recent estimate by the World Gold Council, there is around 18,000
tonnes of gold lying with individuals in India and as much as 65 per cent of India‟s gold
lies with people in rural areas. Indian households have been buying gold for generations
for socio-cultural, religious and economic reasons. Gold is a store of value and hedge
against inflation. With gold prices zooming, borrowers have discovered that they can
raise more money with the same collateral. With gold loans, small individual players
have superseded those in the big cities to leverage their possession of gold jwellery to
avail quick loans for businesses.

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Gold loan market Survey
Gold loan is a simple modification of the age-old practice bymoney lenders and has
been institutionalized by the bank snow. 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 up to 60 per cent of the gold deposited.
A Study on Perception of investors towards Gold as
an investment
Since the beginning of civilization, gold has been one of the most sought after metals in
the world. Because of its durability it has
been used by nations as fiat currency. Nations may fall, paper money may lose its value
but gold will always remain as something of value. But
there are certain disadvantages in investing gold. As compared to other precious
metals, gold has a low industrial demand. Largely investors
only decide its demand and value. In the short run, gold is an excellent store-house of
wealth as long term investment gold is not an ideal
investment. This is because its return is easily outplaced by the equity market.
Moreover investment in gold has no payout in terms of dividends.
This study aims at collecting investor‟s response towards investment in gold. Seventy
five respondents were interviewed through structured
questions. Pros and cons of investing gold have been elicited.
The author has highlighted the limitations in investing in gold. It is learned that gold
import has eroded most of our foreign currency.so it will
increase our current account deficit resulting in declining our rupee value against dollar.

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SWOT Analysis for kotak Mahindra bank
Strength:
Good brand image
Financially strong
Stable and growing firm
Weakness:
Lacking extensive global services
Opportunity:
Diversifying portfolios for customers
Good sales team
Increase their services for customers
New emerging markets
Threats:
Lack of public truss

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Research problem
Customer Perception about Gold Loan as Short Term of Finance

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Literature Review
By M.S Sibi(2014)covers the gold loan protection practices among borrowers in
financial institutions. The
aim of this paper is to collect the borrowers‟ opinion towards protection practices
followed by Banks and NBFCs. The aim was achieved through a descriptive study
involving a survey. The dataset from the sample underwent series of statistical analysis,
i.e. chi-square test Loan against gold are traditionally considered taboo especially in
Indian households. Even when gold is pledged, it is still done as the last resort.
By Jasvindarjit Kaur (2016) India is known to be the largest importer of gold in the
world. Indians have strong fascination and high sentiments to possess the gold.
Resultant, the gold loan market also shown vigorous growth in the recent years. Gold
loan NBFCs has created a remarkable position for themselves in the process of
economic development and financial inclusion by monetizing the idle gold stock of the
country on one hand. On the other hand gold loan NBFCs meet the consumption and
financing needs especially of the rural and under banked populaces. But on the same
time the robust growth of these gold loan NBFCs and their aggressiveness in tapping
the potential gold loan market necessitated that their operations should be closely
monitored. So, the present study is an endeavor to analyze and compare the financial
performance of the two giant gold loan NBFCs namely Manappuram Finance Ltd. and
Muthoot Finance Ltd. on the basis of CAMEL model. Overall, the study resulted that
both the gold loan NBFCs perform on the same lines on the parameters of CAMEL
model. But Manappuram Finance Ltd. is better performer in context of capital adequacy
parameter while Muthoot Finance Ltd. is gaining lead in context of management
efficiency.

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By Priya Narayan , Balagopal Gopalkrishnan , Arvind Sahay(2017) India is the
second largest consumer of gold in the world and gold is a major contributor to the
current account deficit. Much of the gold goes out of circulation and is not available to
support economic activity. To encourage consumers to bring the gold back into
circulation, the government of India instituted the Gold Monetization Policy in 2015. This
research views the Gold Monetization Policy in India through the lens of consumer
associations with gold, as well as the banker and refiner perspectives on
implementation challenges. The success of this policy is important for the country to
better manage its current account balance, in a milieu where gold consumption holds
sociocultural importance. The research uses an empirical approach to analyse how
various stakeholders have approached the policy, and provides suggestions to increase
uptake of the policy. It employs a mixed method approach to understand the motivations
and barriers faced by various stakeholders in the gold ecosystem.

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Research Objective
Primary Objective: Primary objective of my study is to understand the perception of
consumers‟ about gold loan as a short term source of finance.
Secondary Objectives:
To understand consumers‟ awareness about different short term sources of
finance
To understand thinking of consumers about gold loan as an option of short term
source of finance.
To understand the impact of culture and education on preference of gold loan as
a short term source of finance.

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Hypothesis Statement
H0: There is no impact of culture on consumers‟ preference about gold loan as a short
term source of finance
H1: There is impact of culture on consumers‟ preference about gold loan as a short term
source of finance
H0: There is no impact of Education on consumers‟ preference about gold loan as a
short term source of finance
H1: There is impact of Education on consumers‟ preference about gold loan as a short

41
Research methodology
Type of data Primary
Research design Descriptive
Population (type & size) Population of Bhavnagar city
Sampling method Non probability convenience sampling
Sample size 377
Data collection method Survey
Data collection instrument Questionnaire
Data analysis tools and techniques Tabulation , graphs and chi-square
technique for hypothesis testing

42
Sample Size
What margin of error can you accept?
5% is a common choice
5
%
What confidence level do you need?
Typical choices are 90%, 95%, or 99%
95
%
What is the population size?
If you don't know, use 20000
20000
What is the response distribution?
Leave this as 50%
50
%
Your recommended sample size is 377
Alternate scenarios
With a sample size of 100 200 300 With a confidence level of 90 95 99
Your margin of error
would be
9.78
%
6.89
%
5.62
%
Your sample size would
need to be
267 377 643
Equation for calculating Sample size:
In terms of the numbers you selected above, the sample size n and margin of error E are given by
x = Z(c
/100)2
r(100-r)
n = N x
/((N-1)E
2
+ x)
E = Sqrt[(N - n)x
/n(N-1)]
where N is the population size, r is the fraction of responses that you are interested in, and Z(c/100)
is the critical value for the confidence level c.

43
Data analysis and interpretation
1. How many sources of finance you aware of.
Particulars Responds
Personal loan 145
Loan against property 60
Loan against security 42
Loan against insurance policy 15
Loan against fixed deposit 26
Gold loan 80
Other 8
38.46
15.9111.14
3.97
6.89
21.22
2.12
Personal Loan
loan against property
loan against security
loan against insurance policy
loan against fixed deposit
gold loan
others

44
Interpretation:
From the above chart we can conclude that 38.46% responds are in personal loan,
11.14%are on loan against security, 3.97% are responds are loan against insurance
policy, 15.91% responds are for the loan against property, while 6.89% are responds on
fixed deposit and 21.22% and 2.12 % are for gold loan and other loan respectively.

45
2. Have you ever used any one of the below given source of finance
Personal loan 92
Gold loan 147
other 12
Interpretation:
are for the loan against property, while 6.1% are responds on fixed deposit and 38.99%
and 3.18 % are for From the above chart we can conclude that 24.4% responds are in
24.4
10.61
4.78
11.946.1
38.99
3.18
Personal Loan
Loan against property
lLoan against Security
Loan against insurance policy
Loan against fixed deposit
Gold loan
others

46
personal loan, 4.78% are on loan against security, 11.94% are responds are loan
against insurance policy, 10.61% responds gold loan and other loan respectively.

47
3. Rate the following sources of finance for short term on the basis
of preferability
33.42
3.187.16
2.39
20.69
30.24
2.92
personal loan
Loan against property
Loan against security
Loan against insurance policy
Loan against Fixed Deposit
Gold loan
others
Personal loan 126
Gold loan 114
other 11

48
Interpretation:
From the above chart we can conclude that 33.42% responds are in personal loan,
7.16% are on loan against security, 2.39% are responds are loan against insurance
policy, 3.18% responds are for the loan against property, while 20.69% are responds on
fixed deposit and 30.24% and 2.92 % are for gold loan and other loan respectively.

49
4. I regularly invest in gold.
Strongly agree 168
Agree 65
Can’t say 30
Disagree 85
Strongly disagree 29
Interpretation:
From the above chart we can see that 44.56% are strongly agree with this statement ,
while 17.24% responds are agree and 7.96% , 22.55% , 7.69% responds are can‟t say
, disagree and strongly Disagree respectively
44.56
17.24
7.96
22.55
7.69
Strongly agree
Agree
Can't say
Disagree
Strongly Disagree

50
5. Whenever I have access money I Purchase Gold or Gold ornaments.
Strongly agree 168
Agree 40
Can’t say 54
Disagree 78
Interpretation:
while 10.61% responds are agree and 14.32% , 20.68% , 9.81% responds are can‟t
say , disagree and strongly Disagree respectively.
44.56
10.61
14.32
20.68
9.81
Strongly Agree
Agreee
Can't say
Disagree
Strongly disagree

51
6. Nowadays the Loan against gold is becoming one of the popular
sources for short term and urgent financial need.
Strongly agree 204
Agree 64
Can’t say 17
Disagree 62
Interpretation:
54.11
16.97
4.51
16.45
7.96
Strongly Agree
Agree
can't Say
Disagree
Strongly Disagree

52

53
7. Banks prefer more secured loans against unsecured loans because
of increasing NPA issues.
Strongly agree 64
Agree 73
Can’t say 94
Disagree 104
Interpretation:
16.97
19.36
24.93
27.6
11.14
Strongly agree
Agree
Can't Say
Disagree
Strongly Disagree

54
say , disagree and strongly Disagree respectively

55
8. Banks’ policy of focusing more on secured loans has generated
more popularity to gold loan and other secured loans like loan
against property etc.,
Strongly agree 40
Agree 73
Can’t say 106
Disagree 78
Interpretation:
10.61
19.36
28.11
20.7
21.22
Strongly Agree
Agree
Can't Say
Disagree
Strongly Disagree

56

57
9. There is nothing bad in taking loan against the gold.
Strongly agree 214
Agree 50
Can’t say 0
Disagree 73
Interpretation:
56.8
13.3
0
19.3
10.6
Strongly Agree
Agree
Can't say
Disagree
Strongly disagree

58
while 13.3% responds are agree and 0 , 19.3% , 10.6% responds are can‟t say ,
disagree and strongly Disagree respectively

59
10. Gold loan is very good and convenient option for short term
need of money but it is treated badly in our culture.
Strongly agree 217
Agree 30
Can’t say 2
Disagree 30
Interpretation:
57.6
7.950.51
7.95
25.99
Strongly agreee
Agree
Can't Say
Disagree
Strongly Disagree

60
while 7.95% responds are agree and 0.51% , 7.95% , 25.99% responds are can‟t say ,

61
11. Taking Gold loan is socially not accepted option in our society.
Strongly agree 194
Agree 60
Can’t say 15
Disagree 40
Interpretation:
51.45
15.92
3.97
10.6
18.04
Strongly Agree
Agree
Can't Say
Disagree
Strongly Disagree

62
12. I prefer Gold loan as last option for generating finance.
Interpretation:
8.49
27.58
8.7528.64
26.53
Strongly Agree
Agree
Can't Say
Strongly agree 32
Agree 104
Can’t say 33
Disagree 108

63
13. I prefer Gold loan when any other source is not possible.
20.68
17.77
24.94
16.45
20.16
Strongly Agree
Agree
Can't Say
Disagree
Strongly Disagree
Strongly agree 78
Agree 67
Can’t say 94
Disagree 62

64
Interpretation:

65
14. Taking Gold loan is sign of insolvency.
Interpretation:
9.81
6.63
17.24
9.01
57.3
Strongly Agree
Agree
Can't Say
Disagree
Sstrongly Disagree
Strongly agree 37
Agree 25
Can’t say 65
Disagree 34

66
15. Gold loan is very easy and convenient option for short term
Finance but not popular because our culture treats it as bad.
Interpretation:
37.6
19.7
6.1
25.99
10.61
Strongly Agree
Agree
Can't Say
Disagree
Strongly Disagree
Strongly agree 142
Agree 74
Can’t say 23
Disagree 98

67

68
Hypothesis Testing
H0: There is no impact of culture on consumers‟ preference about gold loan as a short
H1: There is impact of culture on consumers‟ preference about gold loan as a short term
source of finance
Response positive impact Negative impact Total
Strongly Agree 194 142 336
Agree 60 74 134
Disagree 68 40 108
Strongly Disagree 40 98 138
Can‟t Say 15 23 38
Total 377 377 754
Chi-Square Test = (F0 – Fe)2
Fe
Where,
F0 = Observed frequency
Fe= Expected frequency

69
X2
Table for hypothesis testing
Observed
frequency
Expected
frequency
F0 – Fe (F0 – Fe)2
(F0 – Fe)2
Fe
194 168 26 676 4.0238
60 67 -7 49 0.7205
68 54 14 256 4.7407
40 69 -29 841 12.1884
15 19 -4 16 0.8421
142 168 -26 676 4.0238
74 67 7 49 0.7205
40 54 -14 256 4.7407
98 69 29 676 12.1884
23 19 4 16 0.8421
TOTAL 45.031
(R-1)(C-1)
= (5-1) (2-1)
= 4
Significance level= 0.05 (5%)
Calculated value= 45.031

70
Tabulated value= 9.4877
Calculated value (45.031) > tabulated value (9.4877)
So, hypothesis is rejected

71
H0: There is no impact of Education on consumers‟ preference about gold loan as a
short term source of finance
H1: There is impact of Education on consumers‟ preference about gold loan as a short
Education Yes No Total
Below Graduate 32 108 140
Above Graduate 104 100 204
Total 136 208 344

72
Observed
frequency
Expected
frequency
F0 – Fe (F0 – Fe)2
(F0 – Fe)2
Fe
32 70 -38 1444 20.6285
104 102 2 4 0.0392
108 70 38 1444 20.6285
100 102 -2 4 0.0392
TOTAL 41.3354
(R-1)(C-1)
= (2-1) (2-1)
= 1
Significance level= 0.05 (5%)
Calculated value= 41.3354
Tabulated value= 3.8415
Calculated value (41.3354) > tabulated value (3.8415)
So, hypothesis is rejected

73
Research Findings
We have to change our perception through education.
It is all about human perception.
Taking gold loan is bad in our society that will be change.

74
Recommendation:
The main aim of the research was to help the organization the increase productivity and
efficiency of gold loan. So there are some Recommendation that can be help for the
employee.

75
Limitation of the study:
The main factor of study that our culture and societies perception are bad to
take the gold loan
Perception are also depends on the education because of many times it is
good source of finance.

76
Conclusion
I have completed my report as a researcher. I conclude that kotak Mahindra bank is good bank
ever. It always tries encouraging their customer for the taking gold loan.
I have increased my knowledge to a great experience. it is my pleasure that it was a very well
opportunity for me to do research on this great bank.

77
BIBLIOGRAPHY:
Kothari C.R,” Research Methodology,” Second edition , New Age International
Pvt. Ltd., New Delhi.
www.kotak.com
www.irjbm.org
www.pbr.co.in

78
A Questionnaire on
Consumer’s Perception about Gold Loan as a short term source of Finance
1. How many sources of finance you aware of
€ Personal Loan
€ Loan against Property
€ Loan against Security
€ Loan against Insurance
Policy
€ Loan against Fixed
Deposit
€ Gold Loan
€ Others,
specify______________
2. Have you ever used any one of the below given source of finance
€ Personal Loan
Policy
Deposit
€ Gold Loan
€ Others,
specify______________
3. Rate the following sources of finance for short term on the basis of preferability
€ Personal Loan
Policy
Deposit
€ Gold Loan
€ Others,
specify______________
4. I regularly invest in gold
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
€ Strongly disagree
5. Whenever I have access money I Purchase Gold or Gold ornaments.
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree

79
6. Nowadays the Loan against gold is becoming one of the popular sources for
short term and urgent financial need.
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
7. Banks prefer more secured loans against unsecured loans because of increasing
NPA issues.
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
8. Banks‟ policy of focusing more on secured loans has generated more popularity
to gold loan and other secured loans like loan against property etc.,
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
9. There is nothing bad in taking loan against the gold
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
10.Gold loan is very good and convenient option for short term need of money but it
is treated badly in our culture.
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
11.Taking Gold loan is socially not accepted option in our society.
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
12. I prefer Gold loan as last option for generating finance
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree

80
13. I prefer Gold loan when any other source is not possible
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
14. Taking Gold loan is sign of insolvency.
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
15. Gold loan is very easy and convenient option for short term finance but not
popular because our culture treats it as bad.
€ Strongly agree
€ Agree
€ Can‟t say
€ Disagree
Demographic Information:
Name:
Age:
Occupation:
Education:
Contact

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