Bankbazaar Collaborates With Muthoot Fincorp To Launch Digital Gold Loans; Details Here

BankBazaar.com has made a strategical move into nan secured lending assemblage by partnering pinch Muthoot FinCorp to motorboat a digital-first golden indebtedness product. This collaboration combines nan expertise of a 138-year-old conglomerate pinch nan technological prowess of a 17-year-old fintech platform. As portion of this venture, Muthoot FinCorp has besides invested successful BankBazaar’s Series D2 backing round, thereby strengthening their financial and operational alliance.

The business intends to supply speedy and unafraid golden loans by merging BankBazaar’s integer capabilities pinch Muthoot FinCorp’s extended operational infrastructure. BankBazaar will oversee integer onboarding, marketing, and customer engagement, while Muthoot FinCorp will negociate KYC, valuation, disbursal, and storage. This integration seeks to reside nan predominantly informal golden indebtedness marketplace successful India, wherever astir 65% of loans are still provided by unregulated lenders. 

In nan collaboration betwixt NBFC and FinTech sector, Muthoot FinCorp has contributed Rs 15 crore to BankBazaar's ongoing Series D2 information arsenic an equity investor, successful bid to heighten nan integer platform.

During nan D2 information of fundraising, BankBazaar.com successfully raised Rs 55 crore, resulting successful a institution valuation of Rs 1,700 crore. Of this amount, Muthoot FinCorp's finance of Rs 15 crore secured them a 1% liking successful nan fintech firm, pinch nan remaining Rs 40 crore coming from existing investors.

"Gold loans, being counter-cyclical to unsecured credit, will diversify our portfolio and fortify our offerings. BankBazaar's consumers will summation seamless integer entree to Muthoot FinCorp's high-quality, afloat compliant golden indebtedness products," Adhil Shetty, CEO of BankBazaar.com said.

Muthoot FinCorp's engagement goes beyond operational roles, arsenic nan institution has besides made a financial committedness to BankBazaar by participating successful its ongoing Series D2 backing round. This finance reflects Muthoot FinCorp's assurance successful nan integer modulation of golden loans. Shaji Varghese, CEO of Muthoot FinCorp, commented: "Leveraging BankBazaar’s customer guidelines and analytics, we purpose to guarantee much inclusive in installments access." The collaboration is designed to create a seamless "phygital" experience, ensuring same-day indebtedness disbursal, thereby enhancing customer restitution and operational efficiency.

The Indian golden indebtedness marketplace is mostly informal, pinch a important information of loans offered by unregulated entities. Pankaj Bansal, CBO astatine BankBazaar.com, highlighted nan request for change: "India’s golden indebtedness marketplace remains mostly informal. Our extremity is to connection fair, secure, and digitally accessible products backed by Muthoot FinCorp’s golden lending legacy." This inaugural seeks to supply secure, high-valuation golden indebtedness options backed by a regulated Non-Banking Financial Company (NBFC), ensuring transparency and information for borrowers.

BankBazaar has reported a 62.5% maturation successful co-branded in installments cards successful FY24 and anticipates a 46% yearly gross maturation from FY22 to FY25. The institution is connected way to execute full-year EBITDA profitability successful FY25. With caller investments, BankBazaar’s cumulative equity backing has reached $116 million. The collaboration pinch Muthoot FinCorp not only strengthens BankBazaar's position successful nan fintech marketplace but besides signifies a measurement towards formalising nan golden indebtedness assemblage successful India, offering regulated and unafraid lending options to a wider audience.

RBI golden indebtedness norms

On April 9, nan RBI released draught broad guidelines connected golden loans. According to nan projected norms, lenders are prohibited from offering advances against superior gold/silver aliases financial assets supported by superior gold/silver specified arsenic units of Exchange-traded costs (ETFs) aliases units of communal funds. The maximum loan-to-value (LTV) ratio for depletion golden loans should not transcend 75% of nan gold's value.

The guidelines stated that nan golden collateral must not beryllium concurrently utilized for some income-generating purposes and depletion loans. Lenders are required to refrain from providing loans against collateral pinch uncertain ownership and must support records of collateral ownership verification. The tenor of depletion loans, specifically slug repayment loans wherever some main and liking are owed astatine maturity, should not transcend 12 months, arsenic per nan RBI's directive.

What do these norms mean

The projected changes successful nan caller regulations attraction connected categorizing golden and metallic loans based connected their intended use, distinguishing betwixt loans for income generation, specified arsenic in installments for agriculture aliases mini businesses, and loans for individual consumption.

It is mandated that nan aforesaid golden collateral cannot beryllium utilized simultaneously for some income-generating and depletion loans. Lenders are required to categorize income-generating loans based connected their intent alternatively than simply arsenic golden loans connected their equilibrium sheets.

Additionally, nan cardinal slope has group a maximum repayment play of 12 months for depletion golden loans pinch slug aliases lump sum repayments for banks. Co-operative and location agrarian banks are constricted to a indebtedness magnitude of up to Rs 5 lakh per borrower for specified loans.

The loan-to-value (LTV) ratio for golden loans provided by non-banking financial companies (NBFCs) and for user loans offered by banks will now beryllium constricted to 75%. While banks presently group their ain LTV ratios for agriculture-based golden loans, this believe is expected to stay successful spot for each golden loans intended for generating income.

Published on: Apr 23, 2025 2:29 PM IST