1.

INTRODUCTION

1
 INTRODUCTION
Every modern economy is based on a sound financial system a
financial system. a set off institutional arrangements through
which financial surpluses are mobilized from the unit
generating surplus income and transferring them to the others
in need of them. The activities which include production,
distribution, exchange and holding of financial assets
instruments of different kinds by financial institutions, banks
and other intermediaries, of other market. Among these
organizations, are banks, credit card companies, insurance
companies, consumer finance companies, stock brokerages,
investment funds and some government sponsored enterprises?

The financial markets have two major components; they are

money market and capital market.

Money market

The money market refers to the market where borrowers and

lenders exchange short-term funds to solve their liquidity needs.

Capital market

The capital market is a market for financial investments that

are direct or indirect claims to capital.

Securities market

It refers to the markets for those financial instruments claims

obligations that are commonly and readily transferable by sale.
It has two inter dependent and inseparable segments the new
issues (primary) market and the stock (secondary) market. the
secondary market enables those who hold securities to adjust
their holdings in response to changes on their assessment of

2
risk and return. The primary markets provide the channel of
sale of new securities.

Stock market

A stock market, or equity market, is a private or public. Market

for the trading of company stock and derivatives at an agreed
price, these are securities listed on a stock exchange as well as
those only traded privately. The size of the world stock market
is estimated at about $36.6 trillion us at the beginning of
october2008

FOREX MARKET

The foreign exchange market (currency, forex , or FX) market is

where currency trading takes place .it is where banks and other
official institutions facilitate the buying and selling of foreign
currencies . The FX market is one of the largest and most liquid
financial markets in the world, and includes trading between
large banks, central banks, currency speculators , corporations,
governments, and other institutions.

INDIA INFOLINE

India info line is one stop financial services shop, most

respected for quality if its advice, personalized service and
cutting edge technology. Listed in Bombay and national stock
exchange with a net worth of INR 200 corer and a market cap
of over INR 1970 corer. The company has a network of 976
business locations (branches and sub brokers) spread across
365 cities and towns. It has more than 8000000 customers .it is
registered with NSDL as well as CDSL as a depository
participant, providing a one stop solution for clients trading in

3
the equities market first company in India to foray into the
online distribution of mutual funds.

About IIFL

Company profile
Date of 1995
Establishment
Revenue 156.75 ( USD in Millions )
Corporate 75 Nirlon Complex, Off
Address Western Express
Highway,Goregaon (E) Mumbai
-400063, Maharashtra
www.indiainfoline.com

Management Chairperson - Nirmal Jain 

Details MD - R Venkataraman
Directors - A K Purwar,
Chandran Ratnaswami, Falguni
Sanghvi, Kranti Sinha, Nilesh
Vikamsey, Nirmal Jain, R
Venkataraman, Sat Pal Khattar,
Sunil Kaul, Sunil Lotke

Business Finance - Stock Broking

Operation
Background India Info line (IIFL) is engaged
in business of equities broking,
wealth advisory services and
portfolio management
services. The company was
incorporated in October 1995
as Probity Research & Services
and later in April 2000 the
name was changed to India

4
 Infoline.com.  Then in March
2001 the company again
changed its name to India Info
line.

Financials Total Income - Rs.

7998.667211 Million ( year
ending Mar 2011) 
Net Profit - Rs. 1223.618546
Million ( year ending Mar 2011)

Company Sunil Lotke

Secretary
Bankers
Auditors Sharp & Tannan Associates

India Info line (IIL) is engaged in business of equities broking,

wealth advisory services and portfolio management services.
The company was incorporated in October 1995 as Probity
Research & Services and later in April 2000 the name was
changed to India Infoline.com.  Then in March 2001 the
company again changed its name to India Info line.

The company is part of India Info line Group. It has pan-

 India presence through its distribution network of 607
branches, 151 franchisees located in 346 cities. The company
also has presence in Dubai, New York and Singapore.

IIL operates portals such as www.indiainfoline.com and

www.5paisa.com

The IIFL (India Info line) group, comprising the holding company,
India Info line Ltd (NSE: INDIAINFO, BSE: 532636) and its
subsidiaries, is one of India’s premier providers of financial
services.

5
 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 deposits, Loans, Investment
Banking, Gold bonds and other small savings instruments.

We have a presence in:

Equities our core offering, gives us a leading market share in both

retail and institutional segments. Over a million retail customers
rely on our research, as do leading FIIs and MFs that invest billions.

Private Wealth Management services cater to over 2500 families

who have trusted us with close to Rs 25,000 corers ($ 5bn) of
assets for advice.

Investment Banking services are for corporate looking to raise

capital. Our forte is Equity Capital Markets, where we have
executed several marquee transactions. 

Credit & Finance focuses on secured mortgages and consumer

loans. Our high quality loan book of over Rs. 6,200 corers ($ 1.2bn)
is backed by strong capital adequacy of approximately 20%. 

IIFL Mutual Fund made an impressive beginning in FY12, with

lowest charge Nifty ETF. Other products include Fixed Maturity
Plans. 

Life Insurance, Pension and other Financial Products, on open

architecture complete our product suite to help customers build a
balanced portfolio. 

IIFL has received membership of the Colombo Stock Exchange

6
becoming the first foreign broker to enter Sri Lanka. IIFL owns and
manages the website,www.indiainfoline.com, which is one of
India’s 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 Info line was also adjudged
as ‘Fastest Growing Equity Broking House - Large firms’ by Dun &
Bradstreet. A forerunner in the field of equity research, IIFL’s
research is acknowledged by none other than Forbes as ‘Best of
the Web’ and ‘…a must read for investors in Asia’.

Our research is available not just over the Internet but also on
international wire services like Bloomberg, Thomson First Call and
Internet Securities besides others where it is amongst one of the
most read Indian brokers.

IIFL is a listed company with a consolidated group net worth of

about Rs 1,800 corers. The income and net profit during FY2010-11
were Rs. 14.7bn and Rs. 2.1bn respectively. 

The Group has a consistent and uninterrupted track record of

profits and dividends since its listing in 2005. The company is
listed on both Exchanges and also trades in the derivatives
segment.

IIFL’s Crisil and ICRA Rating for short term is top rated as CRISIL
A1+ and ICRA (A1+) respectively. For long term, IIFL has been rated
ICRA (AA-) by ICRA and CRISIL AA-/Stable by CRISIL indicating high
degree of safety for timely servicing of financial obligations.

IIFL is near you physically: we are present in every nook and cranny
of the country, with over 3,000 business locations across 500 cities
in India. You can reach us in a variety of ways, online, over the

7
phone and through our branches. All our offices are connected
with the corporate office in Mumbai with cutting edge networking
technology. The group caters to a customer base of about a million
customers. 

Our physical presence in key global markets includes subsidiaries

in Colombo, Dubai, New York, Mauritius, London, Singapore and
Hong Kong. 
Milestones
1995

Incorporated as an equity research and consulting firm with a

client Base that included leading FIIs, banks, consulting firms
and Corporate.

1956

With Registration No. 11 93797. We commenced our

operations as an Independent provider of information, analysis
and research covering Indian businesses, financial markets and
economy, to institutional Customers. We became a public
limited company on April 28, 2000 and the name of the
Company was changed to Probity Research and Services
Limited. The name of the Company was changed to India
Infoline.com

1999

Restructured the business model to embrace the internet;

launched Archives.indiainfoline.com mobilised capital from
reputed private Equity investors.

2000

Commenced the distribution of personal financial products;

8
launched Online equity trading; entered life insurance
distribution as a Corporate agent. Acknowledged by Forbes as
‘Best of the Web’ and‘...must read for investors’.

2004

Acquired commodities broking license; launched Portfolio

Management Service.

2005

Listed on the Indian stock markets India Info line fixes a price
band between Rs 70 and Rs 80 for its Forthcoming public issue.
The company is coming out with public issue Of 1.18 corer
shares with a face value of Rs 10 through the book Building
route. The issue is slated to open on April 21 and close on
April 27. Enam Financial Consultants Private Ltd would be the
sole Book running lead manager to the issue while In time
Spectrum Registry Ltd is the registrar to the issue.

India Info line public issue gets 6.6 times oversubscription

IIFL appoints R Mohan as VP India Info line Ltd has informed
that the Company has entered into a Advertising agreement
with Times Group where in the Company and other Group
companies would spend about Rupees Thirty Corers over the
next 5 years in print as well as non print media of The Times
Group.India Info line to buy 75-pc stake in Money tree

2006

India Info line launches exclusive SMS Value Added Service

India Info line enters into strategic agreement with Saraswat
Bank
India Info line to launch stock trading on cell phones
Indiainfoline to roll out MCX, NCDEX, DGCX software
Acquired membership of DGCX; launched investment banking
services

9
2007

Launched a proprietary trading platform; inducted an

institutional Equities team; formed a Singapore subsidiary;
raised over USD 300mn In the group; launched consumer
finance business under the ‘Money line’ brand.

2008

Launched wealth management services under the ‘IIFL Wealth’

brand; set up India Info line Private Equity fund; received the
Insurance Broking license from IRDA; received the venture
capital license; Received in principle approval to sponsor a
mutual fund; received Best broker- India’ award from Finance
Asia; ‘Most Improved Brokerage.
India’ award from Asia money.
India Info line Ltd has informed that the Board of Directors of
the Company have vide circular resolution passed on March 10,

2008

Approved the appointment of Mr. A K Purwar, ex-Chairman of

the State Bank of India, as an independent director on the Board
of the Company.
India Info line Ltd has informed that pursuant to the resignation
Of Mr. Nimish Mehta, Company Secretary and Compliance
Officer of the Company. Ms. Falguni Sanghvi has been
appointed as the Company Secretary with effect from October
07, 2008.
The Company has splits its face value from Rs10/- to Rs2/-

2009

Received registration for a housing finance company from the

National Housing Bank; received ‘Fastest growing Equity
Broking House.

10
Large firms’ in India by Dun & Bradstreet.
2010
Received in principal approval for membership of the Singapore
stock exchange received membership of the Colombo stock
exchange.
2011
launched IIFL mutual fund.

11
 2.
History of Gold Loan

12
History of GOLD loan

Gold is a brilliant yellow precious metal that is resistant to air

and water corrosion. It is a very soft and pure metal. Gold is the
most malleable and ductile metal found on earth. That’s why it
is expensive and it is alloyed with other metals, usually copper
and silver to make it less expensive and harder, a karat is the
unit that measures the purity of gold jewellery or else it is
hallmarked with a three digit number that indicates the parts
per thousand of gold. Some countries hallmark gold with a
three digit number that indicates the parts per thousand of gold.
The alloyed gold comes in many colours and may not be bright
yellow all the time. It has long been a values commodity,
particularly in India where it is considered auspicious, and had
been in use for centuries in the form of jewellery, coins, bullions,
electronics, and dentistry, also for other medical purposes.
Though gold is a highly liquid asset, it wasn’t until recently that
consumers leveraged it effectively to meet their liquidity needs.

Lenders provide loans by securing gold assets as collateral.

Compared with the rest of the world in India the gold loan
market is big business. Until a decade back, most of the
lending was in the unorganized sector through pawnbrokers
and money lenders. However this scenario changed with the
entrance of organized sector players such as banks and non
banking finance companies (NBFCs) which now command
more than 25% of the market. The organized gold loan market
has grown at 40% CAGR form 2002 to 2010. NBFCs have been
a major driving force behind this growth given their extensive
network. Faster turnaround time, higher loan to value ratios and
the ability to serve non-bankable customers. Of late, banks
have improved their gold loan product features and

13
services.Coupled with comparatively lower interest rates
charges, bank stand to gain market share at the expanses of
NBFCs in the near future.

The eligibility criteria required to apply for gold lone in India

includes three factors. Firs-tly, the person has to be above 18
years of age. Secondly, the person applying or a gold loan in
india should have a ID & address proof and last but not the
least the applicant should be working on a regular salary basis ,
means there should be a constant flow of income.

BACKGROUND: GOLD AND THE INDIAN SOCIETY

Gold has traditionally been among the most liquid asset and is
an accepted universal currency. it has traditionally been
consumed by individuals in the form of jewellery, especially in
India were it is considered auspicious. Gold is presumed to be a
safe haven in times of economic uncertainty, a fact exemplified
by a 30% increases the value of gold over the past year India is
one of the largest market of gold accounting for approximately
10% of the total world gold stock as of 2010. Rural India
accounts for 65% of this gold stock. Though gold price have
increased 19% CAGR from 2002 to 2010, gold stock in India has
grown at 22% CAGR During the same period to 18000 tons
(Rs.32000 billion). The demand for gold has followed a regional
trend with southern India accounting for 40% of annual demand,
followed by the west (25%), north (20-25%) and east (10-15%).

Looking for Gold Loan Market

Major Players

The Key Players in the Indian gold loan market include the
unorganized sector, banks _ public/private/cooperatives and

14
NBFCs. While the unorganised sector, comprising local
pawnbroker and money leader has traditionally dominated the
gold loan market for money decades and still commands nearly
75% of the market the organized sector led by NBFCs is
catching up fast. The organized sector has grown at a rapid
paces of 40% CAGR form the 2002 to 2010 and is expected to
grow by 33% to41% CAGR in 2011

And in doing so these companies are challenges the

dominance of the large unorganised sector within the
organized sector, NBFCs have grown at a repaid rate from
18.4% in FY to 32.2% in FY10. (Source: cognizant 20-20 insight
jan.2012)

Muthoot finance

With a tagline loan in just 5 minutes muthoot fiancés is a

India’s largest gold loan company & is the fast choice of Indian
who want to make their dream a reality. May the dream be to
start their own business or to buy their own home: muthoot
finance has helped almost every Indians dream come true,
trusted by over 76000 customer every day muthoot finance
gold loan has services and products that fit the need of any
customers , making it the quickest ,most convenient and safest
way to take gold loan

Headquartered in the southern Indian state of Kerala, their

operating history has evolved over a period of 72 since M
George muthoot (the father of our promoter) founder a gold
loan business in 1939 under the heritage of a treading business
established by his father, ninan mathai muthoot in 1987. since
our formation, we have broadened the scale and geographic
scope of their retail leading operation so that, as of march 31,

15
2008, 2009, 2010, 2011 and in the period ended September 30,
2011 revenue from their gold loan business constituted 95.97%
96.71% 98.08% 98.75% and 99.01% respectively , of their total
income,

Manappuram

Manappuram group was founded by late Mr. V. C.

Padmanabhan many decades ago currently managed by his
son Mr. V. P. Nandakumar, executive chairman of manappuram
general finance & ltd (“manappuram” or MAGFIL) manappuram,
registered as a deposit taking NBFC is the flagship company of
manappuram group

Headquartered in the state of Kerala in southern India is the

largest listed gold loan company in India. Primarily engaged in
providing loans against household used jewellery pledged by its
customer’s. Amongst the safest form of asset lending, with
both physical custody and beneficial ownership with the lender.

MUTHOT FINCORP

Muthoot fincorp limited, the flagship company of the Muthoot

pappachan group (MGP), is a finance company that caters to
the financial needs of retail and institutional customers. They
are registered with the reserve bank of India as a systemically
important non deposit taking non banking finance company
(NBFC) with a paid up capital of Rs 181.25 cores and a net
owned fund of Rs 824.00 corers as on 31. 12. 2011 Muthoot
fincorp limited has wide network of over 2200 branches (as on
31/3/2012) and expanding more.

KARVY FINANCE

KARVY, the parent group is one of India’s largest integrated

16
financial services providers with a 25+ year operating history.
KARVY covers the entire spectrum of financial services
providers with a stock broking. Commodities broking / finance
registry services depository services merchant banking &
corporate finance IPO distribution investment banking realty
services insurance broking / distribution and distribution of
financial products like mutual funds bonds personal finance
advisory services BPO / technology services wealth
management and loans KARVY has pan India personal with
over 575 offices in 375 locations across India and overseas at
Dubai and New York and has over 9000 highly qualified staff.
Keeping in line with KARVY credo to be a leading and preferred
financial services provider the focus of KARVY finance will be
to provide the complete spectrum of financial services
products to their customers and build a strong nationwide
distribution footprint to emerges as the leader in capital
markets and retail finance in India

Their niche lies in the fulfilment of customers financial needs at

all stages of their life by making possible simple and flexible
financial solutions tailor made to suit customers requirements

INDIA INFOLINE

The IIFL (India Info line) group, comprising the holding

company, India Infoline Ltd (NSE: INDIAINFO, BSE: 532636) and
its subsidiaries, is one of India’s premier providers of financial
services.

IIFL offers advice and execution platform for the entire range of
financial services covering products ranging from Equities and
derivatives, Commodities, Wealth management, Asset

17
management, Insurance, Fixed deposits, Loans, Investment
Banking, Gold bonds and other small savings instruments.

IIFL has received membership of the Colombo Stock Exchange

becoming the first foreign broker to enter Sri Lanka. IIFL owns
and manages the website, which is one of India’s 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 theAsiaMoney polls. India Info line was also adjudged
as ‘Fastest Growing Equity Broking House - Large firms’ by Dun
& Bradstreet. A forerunner in the field of equity research, IIFL’s
research is acknowledged by none other than Forbes as ‘Best
of the Web’ and ‘…a must read for investors in Asia’.

Our research is available not just over the Internet but also on
international wire services like Bloomberg, Thomson First Call
and Internet Securities besides others where it is amongst one
of the most read Indian brokers.

IIFL is a listed company with a consolidated group net worth of

about Rs 1,800 crores. The income and net profit during
FY2010-11 were Rs. 14.7 billion and Rs. 2.1 billion respectively. 

The Group has a consistent and uninterrupted track record of

profits and dividends since its listing in 2005. The company is
listed on both Exchanges and also trades in the derivatives
segment.

IIFL’s Crisil and ICRA Rating for short term is top rated as
CRISIL A1+ and ICRA (A1+) respectively. For long term, IIFL has

18
been rated ICRA (AA-) by ICRA and CRISIL AA-/Stable by CRISIL
indicating high degree of safety for timely servicing of financial
obligations.
IIFL network over 3,000 business locations spread more than
500 cities in India. You can reach us in a variety of ways, online,
over the phone and through our branches. All our offices are
connected with the corporate office in Mumbai with cutting
edge networking technology. The group caters to a customer
base of about a million customers. 
Our physical presence in key global markets includes
subsidiaries in Colombo, Dubai, New York, Mauritius, London,
Singapore and Hong Kong.

Difference between the GOLD LOAN and personal loan

S.N. BASIS GOLD LOAN PERSONAL LOAN

1 Loan amount No limit Rs 5000/- Min. Amount Rs
onward 10000/-max up to
Rs 1000000/-
2 Mode Cash loan By A/c payee
cheque
3 Rate of interest 11.40 to 26.40% Ranges between 28
based on loan to32%
amount
4 Lock in period No lock in period Ranges between 6
to 12 month
5 Flexibility Totally flexible – Very less EMIs fixed
pre- closure and at the beginning of
part closure the loan.
6 Documentation Address proof ITR form 16
Photo ID ID proof &
PDC residence proof
Driver licence Salary slip &
photograph

19
 Previous track
record.

7 Pre-payment Possible without Usually not possible

penalty before 6 month
after that with
penalty.
8 Hidden No hidden charges Quite many
charges even CWT is borne processing fee,
by the company handling fee,
service charges ,
etc.
9 Customer Loan is provided Only to
profile to all customer professionals or
eligibility salaried class
people in
employment with
good companies.
10 Service No service 2 to 8% loan
charges charges amount payable the
service charges.
11 Interest on part Interest charges On the entire loan
payment only on the amount as fixed in
outstanding the beginning.
amount
12 Penalties No penalties on Heavy penalty on
part and fore part closure.
closure
13 Personalize Prompt and DMAs and DSAs
attention personalized handle the
attention is given customers and not
to the each and get personal
every customer attraction form the
bank.
14 Revolving Available as Loan has the fixed

20
 credit principle gets tenure and payment
revolved on of both interest and
payment of principal is to be
interest every 3 made.
months
15 Verification No field Field verification is
verification carried out.
16 Minimum No such criteria Monthly NET salary
salary criteria be 1.5 items the
EMI.
17 Time duration 10 – 15 days 15 minutes.
18 Secrecy Absolute secrecy No secrecy
is maintained maintained.

Procedure of creating new loan account in gold

lone software
 Open the shortcut of gold loan.
 Put your user ID and password.
 Click on truncation after that go new lone express entry.
 Before doing anything we have to press ‘+’ for further process and
generate gold loan number.

 We have to fill customer details with three stages

 Client details

 Address details

 IP photograph (we browse the photo of customer and gold items

one by one)

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  After fill all these details press ‘save’ GOLD LOAN number will be
generated

When the gold loan number will generated please ensure before doing
further process deduces must be done

 If there is any deviation (in terms of ROI, per gram rate and valuation
%age)so, it should enter in to the client details as the first stage

 Now again we have to fill the details a

 s under
 Appraisal form

 Cash disbursal

 Bank details

Appraisal form :-

Valuer I: Before start anything we have to press on ‘+’ then enter all the
information like item, Gross weight , Net weight, per gram weight after
filling these information press ‘save’ this process should be repeated for
each and every item by valuer I

Valuer II: now the above noted process should be repeated by valuer II
also when we enter the all information on appraisal form finally press
the ‘Edit’ and then ‘Save’.

Cash disbursal: first press ‘+’ then enter the denomination of cash to be
disbursed to the customer then press disburse cash finally we press
‘Edit ‘and ‘Save’.

Bank details: there is no need to fill bank details in the case loan is less
than 10 laces, on the other hand if loan above 10 laces then press add
new then enter the details then press ‘Edit’ and ‘save’.

22
These are the various type of gold testing in India info
line
 Acid test

Acids have +ve charge particle gold rubbing with stone and
throw them acids if gold colour change them the gold is not
original if colour is not change gold is original

 Flexibility test

Gold move in all direction gold is very flexible to move other

element can break when move but gold can’t be break

 Sound test

We check the sound of gold if gold bangle and other

element bangle both are hit any particle we hear the sound if
gold is original it give specific sound if gold is not original it
give same sound as they other bangle.

 Colour test

Gold have yellow colour but if gold is duplicate its colour is

different from yellow

 Smell test

Gold have specific smell as compared to other element if we

have test the gold smell there are the specific machine and
cheek the gold smell

 Salt test

When gold mixed in salt if colour change gold is not original

if colour not change gold is original

 Use ability test

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 Branded new gold are very difficult to check the originality of
gold but already used gold are easily to check the gold
originality

 Weight test

If we see the 50 gram of gold and 50 gram of sugar then

size of gold is small as compare to sugar.

 Rubbing test

When gold rubbing with stone if gold is original it appears

yellow colour if gold is not original it having different colour.

GLOBAL SCENARIO
Loan against gold are traditionally considered taboo in
households. Even when gold is pledged it is still done as the
last resort. Gold jewellery at home is considered on par with
goddess lakshmi and hence hedging gold for a loan is
considered inappropriate.

Gold loan market 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 jewellers, 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 firm
both the consumers and the industry. With gold spiralling
upwards borrowers are able to get decent valuation for their
gold and the process of getting such a secured loan is also

24
largely hassle free the southern Indian markets have been
particularly lucrative for 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 (CAGER) 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.

Why NBFCs are growing

By virtue of their business model, NBFCs have grown rapidly

over the last few years as evidenced by their increase in market
share. The key differentiators for the NBFCs as compared to
the banks and cooperatives are.

 Quick loan approvals and disbursals, with minimal

documentation

 Multitude of loan options with higher LTVs.

 Greater accessibility due to better penetration.

 Better operating cost structure visa-a-vies banks.

 Flexibility provision of very small and very large loan

amounts.

Regulatory environment

While there are no means of controlling the unorganized sector

the organized sector of banks and NBFCs come under the

25
purview of the reserve banks of India (RBI) which has norms to
regulate the gold loan market. NBFCs had been traditionally
disbursing gold loans through funds received from banks under
priority lending for the agricultural sector. The loans under this
category enjoy an interest rate discount of approximately 200
bps over the normal interest rates charged by banks. But to
reduce the risk in the system the RBI ruled in February 2011
that bank credit to NBFCs for lending against gold jewellery will
not be treated as exposure to the agricultural sector. The
resulting higher interest rate for funds is expected to promote
better lending practices by NBFCs to creditworthy borrowers.
With the continued rapid growth of the gold loan market in India
RBI has started examining lenders especially NBFCs for
possible concentration risks (i.e. risks due to a sharp decline in
the prices of gold for a lender with a large exposure to gold
assets pledged against the loans.)

All lenders are required to adhere to the KYC norms. NBFCs

allegedly have not strictly followed this regulation and hence
have been under the RBI s scanner for some time now.
Currently NBFCs gold loan are regulated by RBI. However, some
state governments require compliance with relevant state
money lending statutes .if the state governments succeed in
enforcing this regulation the profit margin of NBFCs would be
further squeezed. There have been recent complaints regarding
high interest rates and penalty rates charged by NBFCs. this
has caught the attention of regulators any regulatory move in
this regard would impact the profit margin of NBFCs.

Impact analysis: RBI’S gold loan regulation for NBFCs

In its latest move, RBI has come up with a norm for NBFCs that

26
does not allow them to offer a loan above 60% of the value of
gold.

Why it is a setback for NBFCs?

RBI’s guideline is a setback for NBFCs because the new rules

require greater capital adequacy for the financing companies
and the thresh hold for the value of loan against gold is
proposed to be at a lower value. This would mean that
ornaments of the same value are expected to result in a lesser
loan amount and that to at a slightly higher cost.

Check out other aspects where NBFCs could be adversely

affected. Earlier NBFCs used to provide up to 80% loan against
the gold now it would be reduced to mere 60% of the gold value.
Gold loans from banks would now become more attractive than
NBFCs until they are allowed to lend more on the value of
pledged gold the cost of funding for NBFCs would go up due to
the RBIs restriction to allow the NBFCs to finance its gold loan
from the banks as an exposure to agricultural loan. NBFCs
might have to reduce the interest rate to sustain hold in the
gold loan market. Hence the current profit margin would come
down significantly.

What’s in favour of NBFCs?

Though this regulation would it hard on the revenue as well

as bottom-line of the NBFCs there still some positive assistive
to this move:

NBFCs would continue to enjoy the nice segment advantage

due to its deep presence in the gold loan market at present;
NBFCs have a 32% share of the total gold loan market. The gold
loan would still be cheaper than the personal loan, so the size

27
of market is set to grow bigger in coming days.

There are many untapped areas where NBFCs could have a

better reach than the banks. The advantage o f trouble free and
quick loan processing by NBFCs would give them the edge over
the banks. NBFCs can raise funds through market borrowings,
i.e. Commercial papers to lower the cost of fund.

28
 3.
LITERATURE REVIEW

29
 LITERATURE REVIEW
The research project is to study “of IIFL gold loan in Sagar city”
kejriwalarun (2012) in his article “riches –to rags story of the gold loan
industry” in “business standard” remarked that “the reason people go to
GLCS is the next -to-nil tome they take in disbursing loans. Typically,
GLCS lend up to 80% of the value of gold, making customers a happy lot.
However, last Month, the reserve bank of INDIA (RBI) reduced the loan-to
-value for GLCS to 60% of the gold content.

Bureau (2012) in his article “gold loan firms setting up SRO as RBI
tightens screws” in “economic times” concluded that “under the lens of
the reserves bank , leading gold finance companies have decided to
form a self- regulatory organization (SRO) which will frame fair business
practices code for the industry.

John navin (2012) in his article “and the RBI on Leander” in “business
world” remarked that ,the stock market did not follow the centre banks
restrictions on the lone size of gold NBFCs to 60% of the loan to value
(LTV) view. The share price of Muthoot finance and Manappuram
finance, the largest and second player, fall 11.35% and 6.1% respectively,
on 22 March, a day after the RBI announcement.

Bureau (2012) in his article “RBI move on gold loan will trim companies
margins” in “economic times” remarked the gold loan financing
companies on Thursday welcomes the latest measures by the reserve
bank, saying they will strengthen the industry, but analysts pointed out
that the clampdown will erode the margins of these companies and
curtail growth.

Jayakumar john (2011) in his article “lure of the yellow metal” in

“business world” remarked the gold loan industry has recorded growth
of 35% over the past three year and explains how various gold loan
companies rises and reach the top positions”

Bureau (2011) in his article “should you invest in NCD of gold loan
Finances Company” in “economic times” concluded that with that we
come to another important aspect of debt investing risk. PUS bonds like

30
those of NHAI, PFC enjoy AAA rating, while muthoot finance enjoys a
crisil AA rating. Manappuram finance has a CARE AA- rating”.

Regoanil (2010) in his article “gold loan: making gold work for you” in
business world remarked that “this perception toward 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
jewellers has gradually seen the entry and growth of NBFCs and bank, a
clear indication of the viability of gold loans as an important loan
product.”

“Jain T.R.” and Aggarwal, Dr S.C., statistics for M.B.A. 2nd edition, VK
publication Malhorta Naresh k and Dash satybhushan, “marketing
research” (6th edition) Pearson publication.

“Kothari C.R.,” research methodology methods & techniques 2nd edition

wishwa prakashan, daryaganj, New Delhi, chapter 4. Page 55-58. Chapter
“Method of data collocation, collection of data through questionnaire,
collection secondary data” are referred before the data collocation form
from this book”

Objectives
 In this project, the primary objective is to the consumer
awareness regarding gold loan

 To find out the competitive positions of India info line

finance limited

 Increases the relationship between India info line & other

company consumer

 To find out the most preferred channel.

 To find out what should do to boost India info line finance

limited.

31
Limitation of the study
 Time limit is the major constraint

 As the manager are busy in their duty schedule it is

not possible for us to spend more time in interaction
and discussion with them

 some difficulty getting the people answer the survey

questions because of their workload and the
responsibility they have busy his work

 As per company rules many information was not

disclosed

 Finding &conclusions are based on superficial

knowledge

 The response given by the respondents may not be

100% accurate and may be biased

32
 4.
RESEARCH
METHODOLOGY

33
 RESEARCH METHOEOLOGY
Research methodology is a way to systematically solve the problem. It
may be understood has a science of studying how research is done
scientifically.

This of research methodology is that it helps in identifying the problem,

collecting, analyzing the required information data and providing an
alternative solution to the problem .It also helps in collecting the vital
information that is required by the top management to assist them for
the better decision making both day to day decision and critical ones.
Report is based on primary as well secondary data, however primary
data collection was given more importance since it is overhearing

Meaning of research

Research is defined as “a scientific & systematic search for pertinent

information on a specific topic” research is an art of scientific
investigation. Research is a systemized effort to gain new knowledge. It
is a careful inquiry especially through search for new facts in any branch
of knowledge. the research for knowledge through objective and
systematic method of solution to a problem is a research

Research design

Research design is the conceptual structure within. Which research is

conducted; it constitutes the blueprint for the collection, measurement
and analysis of data.

As search the design includes an outline of what the researcher will do

from writing hypothesis and its operational implication to the final
analysis of data

Research design can be three types

 Exploratory research design

 Descriptive research design

 Experimental research design

34
The present study is descriptive in nature, as it seeks to discover ideas
and insight to bring out new relationship. For fulfilling the predefined
objectives the descriptive research was conducted. An Exhaustive
market survey of various costumers enough to provide opportunity for
considering different aspects of problem under study

The research objectives, questionnaire was designed.

Data collocation

Two type of data collection primary and secondary

Primary data

Primary data refer to the first hand fresh data collected from the

field it was collected through the questionnaire method.

Questionnaire will includes MCQ, ranking, checklist, and rating type

of equation

Secondary data
Secondary data refer to the already published information. Secondary
data was collected from various sources magazines, journals,
newspaper, internet, government, and industry

Research is based on primary Secondary data. Research has been done

by primary data collection, and primary data has been collected by
interacting with various people in Ludhiana city. The secondary data has
been collected through various journals and websites.

35
Out of total 150 questionnaires distributed only 100 questionnaires were
received back. The questionnaires focused on the gold loan, how you
know about the gold loan, benefit of gold loan, why to deal gold loan and
the level of satisfaction of the customer.

Data sampling
The target audient for this research includes Ludhiana city people. It was
also collected through personal visits to persons, by formal and informal
talks and through filling up the questionnaire prepared. The data has
been analyzed by using mathematical/Statistical tool.

1. Sampling unit:-a decision has to take concerning sampling unit

before selecting sample. Here I have my sample unit includes the
people of Ludhiana gill road market.

2. Sample size:- The sample size of my project is limited to 100

people only. Out of which only 86% people had know about the gold
loan. Other 14% people did not have know about the gold loan.

3. Sampling technique:-the selection of respondents was done on

the basis of convenience sampling. In convincing sampling the
samples are being selected on the basis of ease or convenience. The
respondents who are easily approachable will be selected in this
project.

36
 5.
DATA ANALYSIS AND
INTERPRETATION

37
DATA ANALYSIS AND INTERPRETATION
1. are you aware about gold loan?

option yes No
response 86 14
% 86% 14%

awereness response

14%

yes
no
86%

Analysis: - from the above graph it is clear that 86% of the population are
aware about the gold loan and 14% of the population are not

Interpretation: - from the above graph we can see that majority are
aware about the gold loan and few are not aware about the gold loan.

2. how do you come to know about gold loan?

option TV Wall Direct Newspap banner Friend

Advertiseme paintin marketi er s s&
nt gs ng relativ
e
respon 48 13 22 5 4 8
se
% 48 13 22 5 4 8

38
 reasons of awereness
option TV Advertisement Wall paintings
Direct marketing Newspaper banners
Friends & relatives

4% 8% 0%
5%
48%
22%
13%

Analysis:-it is clear from the table that 48% of the aware only because of
tv advertisement, 13% are because of hoardings, 22% are due to direct
marketing, 5% are newspaper, 4% are banners and 8% are due to
friends and family.

Interpretation:-from the above graph it is clear that majority of the

population are aware only because of TV advertisement, some are
because of direct marketing and very few are because of banners and
newspapers.

3. have you ever deal in gold loan?

Options yes No
Responses 60 40
% 60 40

option yes no

0%

40%

60%

39
Analysis: - from the above graph we can see that 60% of the population
have deal and 40%have not deal in gold.

Interpretation: - from the above graph we can see that most of the
people are dealing in gold loan and very few are not dealing with gold
loan.

4. Do you want to deal in gold loan in future?

Options yes No
Responses 73 27
% 73 27

future dealing
yes no

27%

73%

Analysis:- from the above graph it is clear that 73% of people are in a
favour of dealing with a gold loan in future and 27% are not in a favour.

Interpretation:- from the above graph it is clear that most of the

population are in favour of future dealing with IIFL .And very small are
not in favour.

5:-with which company you deal or you wish to deal?

Options Muthoo Muthoo Mannapura Karvy Futur IIF Othe

t t m financ e L r
finance fincrop e group
Response 29 11 12 8 9 26 5
s
% 29 11 12 8 9 26 5

40
 company
Muthoot finance Muthoot fincrop Mannapuram
Karvy finance Future group IIFL
other
5%
26% 29%

9% 11%
8% 12%

Analysis:- from the above graph it is clear that 29%of the population
dealing with muthoot finance, 26%are dealing with IIFL or wishing to deal
with IIFL and few are dealing with karvy, muthoot fincorp, future group

Interpretation:- from the above graph it is clear that most of the

customer are dealing with muthoot finance and IIFL. And very small are
dealing with Mannapuram, Muthoot fincorp, and very few are dealing
with future group, karvy.

6. which of the following is the most preferable thing at the time of

availing gold loan

Options rate of Maximum Flexibility customer Any other

interest per gram dealing
rate
Responses 70 66 40 69 2
% 28.3 26.7 16.2 27.9 0.8

preferances
rate of interest Maximum per gram rate
Flexibility customer dealing
Any other
1%
28% 28%

16% 27%

41
Analysis:-from the above graph it is clear that 28.3%of the population are
preferring only because of rate of interest ,26.7%are because of max per
gram rate,27.9%are because of good customer dealing because few are
flexibility16.2%and vary few are other

Interpretation:- from the above graph it is clear that most of the

population are preferring company only because of rate of interest,
some are preferring because of max per gram rate and good customer
dealing, and vary few are flexibility and other

7.are you satisfied with the current deal?

Options yes No
Responses 39 61
% 39 61

current deal
yes no

39%

61%

Analysis: - from the above graph it is clear that 39% of the population are
not satisfied with their current deal and 61% of the population are
satisfied

Interpretation: - from the above graph it is clear that most of the

population are not satisfied with their current deal they want to change
their current deal and some are satisfied with their current deal.

42
8. which of the following are Main reason of satisfaction

options rate of Maximum Flexibility customer

interest rate dealing
responses 48 37 9 6
% 48 37 9 6

satisfaction factor
rate of interest Maximum rate
Flexibility customer dealing

6%
9%
48%
37%

Analysis:-from the above graph it is clear that 48%f the population are
satisfied only because of rate of interest 37%are because of max per
gram rate6% are because of good customer dealing 9%because few are
flexibility and vary few are other

Interpretation: - from the above graph it is clear that most of the person
are satisfied with rate of interest and max per gram rate. Some are due
to good customer dealing, and flexibility, and very few are with others.

9. Do you want to change your loan by any other company?

Options yes No
Responses 75 25
% 75 25

43
 company change

no
25%

yes
75%

Analysis: - from the above graph it is clear that 75% of the population
want to change their company and 25%of the population do not want to
change.
Interpretation: - from the above graph it is clear that most of the
population want to change their company and very few want to remain
with the same company.

10. are you aware about IIFL?

Options yes No
Responses 56 44
% 56 44

IIFL awareness
yes no

44%

56%

44
Analysis: - from the above graph it is clear that 56% of the population are
aware about the IIFL and 44%of the population are not aware about the
IIFL.

Interpretation: - from the above graph we can see most of the

population are aware about the IIFL but still the rates of those people are
also high who are not aware about the IIFL.

11. Have you ever visit in any branch of IIFL?

Options yes No
Responses 40 60
% 40 60

branch visit
yes no

40%
60%

Analysis: - from the above graph it is clear that60% of the population

have not visited any branch of IIFL gold loan company and 40% have
visited.

Interpretation:- from the above graph we can see that majority of the
population have not visited any branch of IIFL gold loan company and
few have visited.

45
12. Do you wish to deal with IIFL?

Options yes No
Responses 77 23
% 77 23

IIFL dealing
23%

77%
yes
no

Analysis: - from the above graph it is clear that people want to go the
IIFL because 77% of the population said yes for dealing and very few
said no.

Interpretation: - from the above graph it is clear that most of the

population want to deal with IIFL for the purpose of gold loan and very
few are not interested.

46
 6.

CONCLUSION

47
 CONCLUSION
Most of the companies which are offering gold loan in India are
still at growth stage and hence there are ample of opportunities
for all the companies which are offering gold loan to tap
customer. The perception of customer is yet to be changed
because still they don’t feel comfortable in taking gold loan
because of traditional approach hence there is a lot of
education has to be provided to make people aware of gold
loan. To achieve sustainable growth in this sector India info line
finance limited needs to endeavour with maximum efforts the
company can achieve several milestones in future while
maintaining the existing customer relationship.

48
 7 .

BIBLIOGRAPHY

49
 BIBLIOGRAPHY
 BOOKS

Kothari C.R, Research methodology methods and techniques 2004, new

age international pvt. Ltd, New Delhi

Malhotra Naresh and dash Satyabhushan marketing research, 2010

Pearson publication

Luck davidet al marketing research, 2004 prentice hall India

Kejriwalarun (2012): article “riches to rags story of the gold loan

industry in “business standard”

Bureau (2012): article “gold loan firms setting up SRO as RBI tighten
screws” in “economic time”

johnnevin (2012): article “and the RBI on lenders” in “business world”

Jaykumar, jhon (2011): in this article “lure of the yellow metal” in in

“business world”

Bureau (2012): article “should you invest in NCDS of the gold loan
finance company” in “economic time”

Ragoanil (2012) in his article “gold loan: making gold work for you” in
“business world”

 WEBSITES

www.indiainfoline.com

www.5paisa.com

http://www.business-standard.com/india/news/riches-to-rags-storythe
-gold-loan-industary/473351

http://www.crindia.com/commodity/gold.html

http://www.moneycontrol.com/master/your money /stocks-news-

50
consumption.php?cat= gold& at0no:=703262

http://www.moneycontrol.com/master/your money /stocks-news-

consumption.php?cat= gold& at0no:=694868

http://www.business-standard.com/india/news/rbi-norms-to-moderate
-gold-loan-companies%5cgrowth-crisil/161230/on

51
 8.
APPENDIX

52
 Appendix
Questionnaire

Q.1are you aware about gold loan?

A yes B No

Q.2 how do you come to know about gold loan?

A.TV Advertisement B.Wall paintings/hoardings C.Direct marketing

D.Newspaper E.banners F.Friends & relatives

Q.3 have you ever deal in gold loan?

A. yes B. No

Q.4 Do you want to deal in gold loan in future? (If yes which company)

A. yes B. No

Q.5 with which company you deal or you wish to deal?

A. Muthoot finance B. Muthoot fincrop C. Mannapuram

D. Karvy finance E. Future group F. IIFL

G. other (specify)

Q.6 which of the following is the most preferable thing at the time of
availing gold loan?

A. rate of interest B. Maximum per gram rate C. Flexibility

D. customer dealing E. Any other (specify)

Q.7 are you satisfied with the current deal?

A. yes B. No

53
Q.8 which of the following are main reason of satisfaction

A. rate of interest B. Maximum rate C. Flexibility

D. customer dealing E. Any other (specify)

Q.9 do you want to change your loan by any other company?

A. yes B. No

Q.10 are you aware about IIFL?

A. yes B. No

Q.11 have you ever visit in any branch of IIFL?

A. yes B. No

Q.12 Do you wish to deal with IIFL?

A. yes B. No

54