INTRODUCTION

IIFL was founded in October 18, 1995 by Mr. Nirmal Jain (Chairman and Managing

Director) as an independent business research and information provider. It gradually evolved into

a financial services solution provider. IIFL has a network of 3000 business locations spread over

more than 500 cities and towns across India.

IIFL is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange

(NSE) for securities trading; with MCX, NCDEX and DGCX for commodities trading; and with

CDSL and NSDL as depository participants. IIFL is registered as a Category I merchant banker

and is a SEBI registered portfolio manager.

IIFL is a one-stop financial services shop, most respected for quality of its advice,

personalised service and cutting-edge technology. They have come a long way since their

inception and made a mark in the industry. The IIFL group, comprising the holding company,

India Infoline Ltd and its subsidiaries, is one of leading players in the Indian Financial Services

Space. IIFL offers advice and execution platform for the entire range of financial services

covering products ranging from Equities and Derivatives, Commodities, Wealth Management,

Asset Management, Insurance, Fixed Deposit, Investment Banking, Loans(Gold, Home,

Mortgage, Commercial Vehicle).

IIFL recently received an in-principle approval for Securities Trading and Clearing

memberships from Singapore Exchange (SGX) paving the way for IIFL to become the First

Indian Brokerage to get a membership of the SGX. IIFL also received membership of the

Colombo Stock Exchange becoming first foreign broker to enter Sri Lanka. IIFL owns and

manages the website, www.indiainfoline.com, which is one of 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 Infoline was also adjudged as ‘Fastest Growing

Equity Broking House-Large Firms’ by Dun & Bradstreet.

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A forerunner in the field of equity research, IIFL’s research is acknowledged by none

other than Forbes as ‘Best of Web’ and a must read for investors in Asia. IIFL’s research is

available not just over the internet but also on international wire services like Bloomberg,

Thomson First Call and Internet Securities where it is amongst one of the most read Indian

Brokers.

The Net worth of India Infoline Limited is INR 200/- crore and market cap of over

INR.3716.16/- crore. The company has a network of 4000 business locations (branches and sub-

broker) spared across 900 Cities and Towns. It has more than 2 million customers. The company

has reported consolidated sales of Rs. 687.47 crore and and Net Profit of Rs.70.64 crore for the

quarter ended Dec. 2013

India Infoline Finance Limited is professionally managed and the shares the professional

values and ethos of its parent company. IIFL has acquired and maintained a reputation for

reliability, transparency of operations and absolute integrity. A steady growth rate validates the

trust that industry has reposed in the Company. IIFL offers advices and execution platform for

the entire range of financial services covering products ranging from Equities and Derivatives,

Commodities, Wealth Management, Asset Management, Insurance, Fixed Deposits, Loans,

Investments Banking, Gold Bonds and other small saving instruments

IIFL is near you physically: You can reach them in a variety of ways, online, over the

phone and through their branches. All their offices are connected with the corporate office in

Mumbai with cutting edge networking technology. The group caters to a customer base of about

2 million customers.

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BOARD OF DIRECTORS

Mr. Nirmal Jain

Chairman, India Infoline Ltd.

Mr. Nirmal Jain is the founder and Chairman of India Infoline Ltd. He is a PGDM (Post

Graduate Diploma in Management) from IIM (Indian Institute of Management) Ahmedabad, a

Chartered Accountant and a rank-holder Cost Accountant. His professional track record is

equally outstanding. He started his career in 1989 with Hindustan Lever Limited, the Indian arm

of Unilever. During his stint with Hindustan Lever, he handled a variety of responsibilities,

including export and trading in agro-commodities. He contributed immensely towards the rapid

and profitable growth of Hindustan Lever’s commodity export business, which was then the

nation’s as well as the Company’s top priority.

He founded Probity Research and Services Pvt. Ltd. (later re-christened India Infoline) in

1995; perhaps the first independent equity research Company in India. His work set new

standards for equity research in India. Mr. Jain was one of the first entrepreneurs in India to seize

the internet opportunity, with the launch of www.indiainfoline.com in 1999. Under his

leadership, India Infoline not only steered through the dotcom bust and one of the worst stock

market downtrends but also grew from strength to strength.

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Mr. R. Venkataraman

Managing Director, India Infoline Ltd.

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

B.Tech (electronics and electrical communications engineering, IIT Kharagpur) and an MBA

(IIM Bangalore). He joined the India Infoline Board in July 1999. He previously held senior

managerial positions in ICICI Limited, including ICICI Securities Limited, their investment

banking joint venture with J P Morgan of US, BZW and Taib Capital Corporation Limited. He

was also the Assistant Vice President with G E Capital Services India Limited in their private

equity division, possessing a varied experience of more than 19 years in the financial services

sector.

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IIFL CORPORATE STRUCTURE AND VISION

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IIFL VISION

“To become the Most Respected Company in the financial services space in India”

IIFL Values – GIFTS

1. Growth

IIFL believe in setting challenging targets and achieving them.

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

IIFL has grown from a search firm in 1995 to a leading financial powerhouse in less than a

decade. From research, now the company provides the entire range of services including

Institutional Broking, Investment Banking, Wealth Management Services, Life Insurance

Distribution, Credit and Loans and Gold Loans. In the last five years IIFL has grown at a

compounded annual rate of 30%.

Today, the company has one of the widest networks across the country with more than 3000

business locations spread over more than 500 cities and towns across India facilitating smooth

acquisition and servicing of a large customer base.

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Growth

Integrity

Fairness

Transperency

Services

2. Integrity

At IIFL they believe all employees to implement things which are legally morally and ethically

correct Integrity is the cornerstone on which business is built. No short cuts – compliance is

necessary for business to grow. A cardinal rule – no compromises on ethics and any wrong act

like even fudging a travel bill will mean termination.

3. Fairness

IIFL give all their people equal opportunities.

Ideas / suggestion are always heard by management irrespective of the hierarchy. Merit is the

sole determinant in the career growth of an IIFL employee. The appraisal process in IIFL is

transparent with the employee being evaluated on clearly defined parameters. There are internal

job postings which are posted at regular intervals. IIFL always prefer to fill in vacancies by

internal promotions and only then recruits from external source are considered.

4. Transparency

At IIFL most of the information is available on intranet IWIN (India Infoline Web based

Information Network) via circulars and policies. Employees can also directly communicate with

the top management via the IWIN Q&A (Question & Answer) feature.

5. Service

We believe in acquiring customers, retaining them and keeping them happy. The essence of good

customer service is in forming a relationship with customers for life.

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CSR INITIATIVES BY IIFL

IIFL organizes many activities as a part of its corporate social responsibility initiative.

Employees participate as volunteer at these events.

Some of IIFL’s CSR initiatives are listed below

FLAME – Financial Literacy Agenda for Mass Empowerment

IIFL’s initiative FLAME, Financial Literacy Agenda for Mass Empowerment, was

launched a year ago. Since then, IIFL’s financial literacy campaign gathered momentum

and has covered tens of thousands of investors. The initiative has also covered teenage

school students, underprivileged women living in slum areas, and physically challenged

people across the country. The initiative has taken a multi-pronged approach, spreading

financial literacy through newspaper advertisements, literacy workshops, books and

publications, a financial literacy help-line, the FLAME portal, and social media channels.

IIFL regularly conducts eye donations camps, medical camps and blood donation camps.

Active participation of employees is encouraged in running the whole process.

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IIFL BUSINESSES

1. Broking

Retail – One of the leading brokerage houses in the nation with options to invest

in Equity, Commodity and Currency.

Institutional – High Quality Research and block placement capabilities.

2. Wealth Management

Advisory – IIFL are on the leading Indian Players in Wealth Management and

having Assets under Advisory above 200bn.

3. Financial Product Distribution

Insurance – Leading non-banking distributor of Life Insurance Mutual Funds and

other savings products.

4. Investment Banking

Primary expertise is Equity Capital Markets with a view to leverage institutional

and retail distribution capabilities.

5. AMC- ASSET MANAGEMENT COMPANY

Successfully launched own Mutual Fund with NIFTY ETF and IIFL FMP.

6. Credit and Finance

Mortgage and Gold Loans

Healthcare Financing

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GOLD AND THE INDIAN SOCIETY

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

auspicious. It has traditionally been among the most liquid assets and is an accepted universal

currency. Gold is presumed to be safe haven in times of economic uncertainty, a fact exemplified

by a 58% increase in the value of gold over the past 5 years.

India has traditionally been a leading consumer of gold in the world. Its domestic

production has, of late fallen to insignificant amounts compared to the total demand. It has

grown into one of the largest markets for gold, accounting for approximately 10.2% of the total

world gold stock as of 2010. Rural India accounts for 65% of this gold stock.

Indian households typically have an emotional attachment and sense of personal

belonging to the gold they own, which is usually in the form of jewellery, coins or bars. Thus,

gold owned by Indian families is rarely liquidated unless extreme financial need – consequently,

monetary value of a gold investment is rarely realized. But, pledging gold ornaments and other

gold assets to local pawnbrokers and money lenders to avail loans has been prevalent in the

Indian Society for many decades, particularly in the rural areas. However, over the past decade,

the organized sector – banks and NBFC’s have taken the lead. The urban populace is also

beginning to realize the potential value that can be realized through gold loans, which has led to

rapid growth of the gold loan market in India.

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GOLD DEMAND AND PRICE MOVEMENT

Global Scenario

India's gold demand remained buoyant in calendar 2013 at 975 tonne’s, up by 13 per cent

on the figure for 2012, despite government putting in several restrictions to curb imports,

according to a World Gold Council report. Gold demand in the country was 864 tonne’s during

2012, according to data given in WGC 'Gold Demand Trends 2013' report.

The total jewellery demand in the country in 2013 was up by 11 per cent at 612.7 tonnes

valued at Rs 1,61,750.6 crore compared to 552 tonnes valued at Rs 1,58,359.1 crore in 2012.The

total investment demand for 2013, was up by 16 per cent at 362.1 tonnes from 312.2 tonnes in

2012.In value terms, gold investment demand rose by six per cent at Rs 95,460.8 crore against

Rs 90,184.6 crore in 2012.

The traditional demand for gold has been in household jewellery consumption, industrial

use and investment purpose; it has been seen as a safe haven during the time of financial

turbulence. Recently, many current account surplus countries from Asia, Central Asia and Latin

America have preferred buying large quantities of gold to diversify their foreign exchange

reserves. More recently, the global demand for gold is underpinned by increased demand in

China, continued central bank purchases and inflow into gold related exchange traded funds

(ETF’s).

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Global Gold Supply and the demand for gold in India

Trends in global gold supply and the demand for gold imports from India are portrayed in

Table 1.1. While global gold supply is more or less flat, the share of demand for gold imports

from India in the global supply rose steadily in recent years. When the growth in global gold

supply has been weak, the growth rate of Indian demand for gold is strong at double digits in

more recent years.

Year Global Gold

Supply ($)

Gold Demand

from India

(Ton.)

Growth of

Global Gold

Supply (%)

Growth of Gold

Demand from

India (%)

2002 3667 467 -2.6 -0.9

2003 3953 367 7.8 -2

2004 3426 537 -13.3 46.1

2005 4034 792 17.7 47.5

2006 3559 707 -11.8 -10.7

2007 3554 716 -0.1 1.3

2008 3657 679 2.9 -5.1

2009 4146 743 13.4 9.4

2010 4274 871 3.1 17.2

2011 4030 975 -5.7 11.9

2012 4130 1079 2.5 10.7

2013 4750 2054 1.15 13.0

SOURCE: IIFL LOAN BRANCH

As shown in Chart 1.1 International Gold Prices have risen exponentially in the last

decade. Since 2002, the international gold prices have been grown at compound annual growth

rate of 18%. One of the major components of gold demand in recent years has been investment

demand at global level. More importantly, volatility in international gold prices in the recent

quarters is positive skewed implying that it provides fewer large losses and a greater number of

larger gains.

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Chart 1.1 also confirms that the gold demand has shown a growth at compound annual

growth rate of 8% during the last decade i.e. 2002 to 2012/2013. Such behavior of Gold prices

assumes importance building up to positive expectations by gold investors.

CHART 1.1 GOLD PRICE vs GOLD DEMAND TREND IN INDIA

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Global Gold Supply

Gold Demand from India

As regards the underlying factors for explaining international gold prices, studies suggest

that the international gold price is complex phenomenon affected by economic and political

environment. While in the short run, trend in the gold prices could be due to inter- commodity

substitution on account of movement in their relative prices, in the long run, gold can be used as

an instrument to hedge against inflation. History shows that during periods of financial

turbulence, gold becomes an attractive asset class for investment. More recently, after the 2008-

2009 financial crisis, the demand for gold as collateral has also increased as it does not involve

credit risk and its price generally exhibits counter-cyclical behavior. Similarly, transparent

pricing of gold as compared to other assets may also be another positive factor for its demand.

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GOLD LOAN MARKET IN INDIA

In India, it is believed that the most of gold is held by people in the rural areas and in

many cases this is the only asset they have in their possession though in small quantity. All the

while, rural Indians know that if his, crop fails or his family is sick, he can raise cash in a

moment from the goldsmith or may be pawn brokers and money lenders, because the rural India

lags in availing the banking facilities. Therefore, even the pattern of saving in India differs from

various income groups. While richer sections diversify their portfolio according to risk-return

equation, the poor rely more on commodities like gold as well as silver. The jewellery bought in

times of prosperity has been pawned or sold for cash in periods of distress or need. Over the

years, some portion of this is being used as collateral for borrowing in the Informal market,

though estimates is not available. It is a common practice in India that gold is pawned, bought

back and re-pawned to manage day-to-day needs of the poor and the middle class. The pledging

of gold ornaments and other gold assets to local pawn brokers and money lenders to avail loans

has been prevalent in Indian society over ages. Due to the increased holding of gold as an asset

among large sections of people as also the borrowing practices against gold in the informal

sector have encouraged some loan companies to provide loans against the collateral of used gold

jewelleries for years and over a period to emerge as “Specialized Gold Loan Companies”.

Some independent estimates indicate that rural India accounts for about 65% of the total

gold stock in the country. At times of emergency, gold ensures a loan almost instantaneously for

the poor without any documentation. Most of the loans are for meeting unforeseen contingencies

and may be categorized as personal. Further, growth in middle income classes and increase in the

earning capacity of women, a core customer group for gold is expected to further boost the

demand for gold.

This perception towards Gold loan has gradually undergone a change and individuals

have started seeing the value of loan against gold as against availing a personal loan. The Gold

loan market that was highly fragmented and dominated by local jewelers has gradually seen the

entry and growth of NBFC’s and banks; a clear indication of the viability of Gold loans as an

important loan product.

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The gold loans market has recently seen a lot of action from both the consumers and the

industry. With gold spiraling upwards, borrowers are able to get decent valuation for their gold;

and the process of getting such a secured loan is also largely hassle free. The southern Indian

markets have been particularly lucrative of the gold loan business; - 85% - 90% of the gold loan

market is in the States of Andhra Pradesh, Tamil Nadu and Kerala.

According to an estimation of the ICRA Management Consulting Services (IMACS), the

organized gold-loan market in India stands at $8 Billion and is growing at a compound annual

growth rate (CAGR) of 40% since 2002. There is still ample potential in this segment and with

more banks/ NBFC’s coming into this business, there could be considerable growth in terms of

volume

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PERSONAL LOAN vs. GOLD LOAN

This is a simple modification of the age-old practice by money lenders and has been

institutionalized by the banks now. In this loan one has to deposit the household gold in the form

of jewellery with the bank or financing agency and get a loan of up to 80% of the value of gold

deposited. The process also requires proper documentation such as submission of identify proof,

PAN Card, address proof, etc. The interest rate in this case is much lower than a pure personal

loan as there is security being provided by the borrower. The processing time for personal loans

against gold is quite less as compared to other loans.

How is it different from a conventional personal loan?

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

The repayment tenures of such loans are typically shorter, extending to a maximum of 12

months in most cases

The amount of loan in such a case depends on the value of gold being deposited rather

than the repaying capacity of the individual, which plays a lesser role here

The interest rate of a personal loan against gold is lower than that of a pure personal loan

and ranges around 11-15%.

There is some amount of risk which the financer takes depending on the movement of

gold value in the interim period.

Key Benefits of Personal Loan against Gold:

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

Timely payment is ensured as most Indians relate emotionally to gold and would not like

to lose their family jewellery through defaults.

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

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COMPARISION OF CHARGES BETWEEN PERSONAL AND

GOLD LOAN

CHARGES PERSONAL LOAN GOLD LOAN

Interest Rates 14.25% to 19% 11.5% to 13% p.a (depending

on gold value)

Added Fees Processing fees of 2% to 3% 1% of the loan amount

(depending upon the bank)

Added Fees 2% to 3% Pre Payment

Charges

No pre payment charges

Maximum Loan Rs. 50,00,000 Rs. 1,00,00,000

Maximum Tenure 7 years 2 years

SOURCE: IIFL GOLD LOAN BRANCH

GOLD LOAN-ITS SAFEGUARDS

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A. Ownership of Ornaments

It is advisable that the advances are made to persons properly introduced to the bank. The bank

should satisfy itself about the ownership of the gold ornaments etc. before accepting them for

pledge. The bank should obtain a declaration form the borrower that the ornaments are his own

property and that he has the fullest right to pledge them to the bank. Taking of ornaments for

pledge and release thereof to the parties concerned after repayment of the banks’ due should be

done strictly in the authorized official’s room to avoid any risk.

B. Appraiser

The bank should appoint an approved jeweler or shroff as an appraiser for valuation of the gold

ornaments proposed to be pledged to the bank and obtain adequate security from him in the form

of cash and indemnity bond. Valuation and appraisal of the ornaments in the banks premises

itself would be ideal but when these are not possible, the bank should take suitable precautions

against their loss while in transit. The bank should send the ornaments to the appraiser in a

locked box, one key of which should be kept with the appraiser and the other with the bank. The

box should be sent through a responsible member of the staff along with the prospective

borrower. The placing of ornaments in the box at both the ends should be done in the presence of

the employee carrying the ornaments to the appraiser and the borrower. In the case of IIFL Gold

Loan branches, the two valuer’s and the branch manager appraise the gold ornaments.

C. Valuation Report

The valuation certificate of the appraiser should clearly indicate the description of the ornaments,

their finesse, and the gross weight of the ornaments, net weight of the gold content exclusive of

stones, alloy, strings, fastenings and the value of the gold at the prevailing market price. The

valuation report should be duly signed by the appraiser which should be kept along with the loan

documents of the bank

D. Record Of Security

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The full name of the borrower, his residential address, date of advance, amount and description

of the ornaments in detail should be recorded in the gold ornaments register which should be

checked and initialed by the Manager

E. Custody of Ornaments

The ornaments belonging to each borrower (or articles of each loan) together with a list

indicating the description of ornaments, gold loan account number, name of party, etc. should

separately in small cloth bags. A tag indicating loan account number and name of the party

should be tied to the bag to facilitate identification. The bags should be arranged in trays

according to loan account numbers and kept in the strong room or fire proof safes under joint

custody

F. Period

The period of advance against gold ornaments should be generally restricted to 6 months or 1

year

G. Margin

Adequate Margin on the market value should be maintained. The bank should collect interest on

advances promptly. In no circumstances should it allow to water down the margin by debiting

the interest accrued to the loan amount

H. Return of Ornaments 

On repayment of the loan together with the interest payable in the account, the ornaments should

be returned to the borrower and his receipt obtained in token of having received the ornaments.

I. Part Release 

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While allowing part release of the ornaments against part repayment of the loan, care should be

taken to ensure that the value of the left-over ornaments is sufficient to cover the outstanding

balance with the margin prescribed in the account.

J. Delivery to third Parties

When the ornaments are delivered to third parties, a letter of authority from the borrower and

subsequent confirmation of the borrower should be obtained.  The letter of authority should

contain an undertaking by the borrower, absolving the bank of any responsibility in the event of

dispute or loss arising from the delivery of the ornaments to the party named therein.  The receipt

of the third party should be obtained on the letter of authority as well as in the gold loan ledger.

K. Default

When the borrower fails to repay the loan on the due date, a notice calling upon him to repay the

loan within a specified time should be given and if no response is received, a reminder should be

sent by registered post informing the borrower that the ornaments would be auctioned and after

adjusting the sale proceeds against the outstanding dues to the bank, the balance, if any, would

be paid to the borrower against his receipt.

L. Re-pledge of Ornaments 

It is not advisable for banks to make advances against re-pledge of ornaments as this facility is

likely to be misused for financing moneylenders, which is not a desirable activity.

M. Insurance 

The jewels pledged to the bank should be insured for the appraised value against the risk of

burglary.  Surprise verification of the packets containing gold/silver ornaments by an officer

other than the joint custodian is undertaken and should be recorded in a separate register with

necessary details.

CARAT & KARAT

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

100% purity is not available, because sometimes other metal particles may be available

while refining. So, the pure gold is denoted as 24 Karat or 99.99% Gold.

ISO Standards of Gold Purity

Karat Percentage (%)

24 99.99

22 91.60

21 87.50

18 75.00

14 58.50

9 37.50

Carat

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

Diamonds.

Carat Weight

1 Carat 0.200gm (or) 200mg

1 Carat 100 Cents

1 Carat 0.002gm (or) 2mg

PRODUCT FEATURES OF GOLD

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Secured Loan is borrowed against the gold deposited by the applicant

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

Low Disbursal times NBFC’s and the unorganized sector disburse loans at a much faster

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

High Loan To Value

(LTV)

Banks typically not give more than 75%, NBFC’s with RBI cap lends

almost 75%

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

days

Varied interest rates Depends on tenure and amount of loan. It varies from 12% to 18% in case

of banks, while for NBFC’s it could reach 24%. Unorganized sector

charges higher in range from 30%-50%.

Multiple Repayment

Options

Repayment in terms of interest only during the term and principle in end

or, repayment through EMI covering interest as well as principle; Most

payments are in case

SOURCE: IIFL GOLD LOAN BRANCH

INDIA INFOLINE FINANCE LIMITED-GOLD LOAN

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Gold loan or loan against is the easiest and quickest way for servicing your financial

needs. To avail a gold loan, all you need to do is pledge your gold ornaments with them and they

would provide you with a loan amount as per the market value of your gold. Unlike other loans,

gold loan does not require you to provide income or salary proof. Moreover, it has comparatively

lower interest rates; requires lesser documentation, and hence is processed in lesser time.

IIFL provides maximum loan against your gold at lowest interest rates. They also have a

strong presence Pan- India and have serviced a large number of customers in a very short span.

They offer different types of schemes as per your requirement and convenience. Following are

the main features of their loan:

The Main Features:

The secondary study suggests that IIFL are performing well in terms of the features

offered and flexibility of their offerings. The chart provides with the feature details:

Features IIFL GOLD LOAN

Turn Around Time (TAT) 5 Mins to 30 Mins

Working Hours 9:00 AM TO 6:00 PM

Loan-To-Value (LTV) 70% to 75%

Interest Rates 18% to 21%

Terms and Conditions Flexible Terms

Product Range/ Tenure 7 days to 1 year

Pre-Payment Penalties Rs.49/Rs.99/Rs.149 (depending on loan amt.)

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

Documentation Identity Proof, Address Proof (KYC Norms)

SOURCE: IIFL GOLD LOAN BRANCH

ADVANTAGES OF GOLD LOAN

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Gold loan doesn’t demand any certificate to show your salary or income and even no

credit card history is required. Thus even an unemployed and non-working people can go

for gold loan

Unlike any other unsecured loan, gold loan doesn’t require many papers, only few

documents such as ID proof and Address proof is enough to avail a gold loan

One of the main advantages of gold loan is its low interest rates. Usually loan over gold is

provided at the interest of 12-16% per annum and this is quite low compared to personal

loans available at interest rates of 15-25% per annum

In rural areas, agricultural loan against gold is also available for agriculturist at a very

nominal rate of interest at 7% to 8%, proof of agriculture document needs to be provided

Gold loan is the most simple and convenient forms of loan because here all you need to

do is pledge your gold with a bank or finance company and get up to 75% of the market

value of the gold as loan

RBI GOLD LOAN REGULATIONS FOR NBFC’S

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The Reserve Bank Of India (RBI) tightened regulations governing Non Banking Finance

Companies (NBFC’s) lending against gold jewellery

The new rules include strict documentation for high value loans against gold and

prohibition on misleading advertisement by NBFC’s such as offering availability of gold

loans in a matter of 2-3 minutes

The amount that can be lent against gold has been maintained at 75%. This means for

gold worth Rs.100 offered as collateral, lenders can give loans up to Rs.75

Also NBFC’s financing against the collateral of gold must insist on a copy of the PAN

card of the borrower for all transactions above Rs.5,00,000 and all the high value loans of

Rs.1,00,000 and above must only be disbursed by check

RBI has also asked NBFC’s to make the auction process of the gold more transparent by

disclosing the details for auction process in the annual report, including full details of the

value fetched in the auction

The Reserve price for the pledged ornaments should not be less than 85% of the previous

30 day average closing price of 22 carat gold as declared by the Bombay Bullion

Association Ltd, an industry body.

HOW IS GOLD VALUATED AT IIFL GOLD LOAN BRANCH

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Before using the touch stone, it should be cleaned & some drops of coconut oil have to be

applied over the surface evenly.

While checking the gold in touch stone, the rubbing should be done deeply & repeatedly

rubbing in the same place 8 to 10 times. The rubbing length should not exceed 2cms.

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

a) Hardness

b) Blister

c) Color

While rubbing the gold, if the rubbing seems to be soft, it shows high percentage of gold

(88% to 91.60%).

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

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

like dim

When rubbing gold, if blister are not found, it may be low percentage & it may look like

bright. Then we have to find the color code of the rubbing.

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But for confirming the percentage of gold, we have to use the nitric acid & sodium

chloride (salt).If we rub metal other than gold, while applying nitric acid, the rubbing will

disappear quickly.

If we rub the gold of 50% & below, while applying nitric acid, the rubbing will not

disappear quickly. Only color will change to reddish. After applying salt, the rubbing will

disappear & luster will form in that place.

GOLD LOAN BRANCH PROCESS

- Customer Care Executive

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Explains the various scheme.

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

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

BM – ID & Address Proof Verification.

- Valuer 1

Confirms the count and gross weight.

Check gold for its purity.

Brief the customer about their requirement and other features.

- Valuer 2

Confirms the purity by testing.

Passes the appraisal sheet to BM.

Branch Manager (BM)

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

CCE – At the same time, CCE and valuers does system entry. Signature of customer,

valuer’s & BM done in the loan docs. Paper passed on to Cashier.

Cashier

Disbursement of cash along with denomination noting in cash register.

ROLE OF STAFF ENGAGED IN THE PROCESS

Role of a Customer Care Executive:

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Handling inquiries from customers regarding loans against gold.

Helping customer to solve his/her all queries.

Explaining terms and conditions of the product to the customer.

Ensuring all the KYC documents are verified with original.

Ensuring all the details are filled up in Customer Detail Form.

Role of Valuer 1 & 2:

Checking the jewellery with accuracy

Testing gold with two methods which include, Skin Test & Salt Test.

Finding out the purity & making appraisal sheet.

Working out on loan amount with mutual conversation.

Every gold jewellery item must be counted and matched with the appraisal sheet before

inserting it in gold packet.

Each & every details mention on packet must be filled in with accuracy.

It is important to keep gold packet in serial order in vault.

Role of Cashier:

To make sure that cash is taken from vault strictly as per cash denomination entered in

the system.

Ensuring that cash is counted twice before giving it to customer.

To make sure that cash transaction is done in front of CCTV camera.

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Role of Branch Manager:

Branch Manager has to explain customer about RTGS process.

Convince customer to opt for RTGS/NEFT mode of cash transfer.

Explain customer about the advantages of RTGS/NEFT process.

Make sure that address verification is done by BM before disbursal of loan.

COMPETITIORS

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MUTHOOT FINANCE GOLD LOAN:

Muthoot is a Kerala originated association set up by Muthoot Ninan Mathai in 1887 at

Kozhencherry in Travancore district which was later being adopted by M. George Muthoot.

Loan is received within a time period of 5 min. The loan amount ranges from Rs.1500 to Rs.1

crore , 0% processing fees, Interest rate of 1% per month.

MANNAPURAM FINANCE GOLD LOAN:

Mannapuram Finance also facilitates gold loan within 5 mins. It helps to draw instant

Cash by subscribing gold ornaments and jewellery. It provides loan at higher points, based on

purity, net weight of gold. The candidate must have one recent ID- Voter ID/ Ration Card/

Driving License/ Passport. No time-consuming formalities required.

UNION GOLD LOAN:

Union gold loan provides credit facility to needy farmers. The lending rate is Rs.1,800

per gram gold ornaments. Under non- priority sector for basic necessities for unforeseen

expenses. Loan amount consumption is up to Rs.2,000. The maximum loan amount is

Rs.5,00,000.

HDFC GOLD LOAN:

HDFC Gold loan term loan provides instant loans. Regular interest on loan is being

granted. Identity Proof like Passport/ Voters ID/ Adhar Card along with proof like Ration Card/

Telephone bill and 2 passport size photographs are also required.

SBI GOLD LOAN:

SBI gold loan is loan which satisfies as a biggest advantage to overcome crisis and is a

personal loan phenomena. It has low interest rates. The loan amount of Rs.10,00,000 can be

attained by the customer. It also provides gold loan for farmers for agricultural necessities

NBFC MARKETING

31

We define NBFC marketing as follows: “NBFC marketing is the aggregate of functions,

directed at providing services to satisfy customers’ financial (and other related) needs and wants,

more effectively and efficiently that the competitors keeping in view the organizational

objectives of the NBFC”. NBFC’s marketing activity. This aggregate of functions is the sum

total of all individual activities consisting of an integrated effort to discover, create, arouse and

satisfy customer needs. This means, without exception, that each individual working in the

NBFC is a marketing person who contributes to the total satisfaction to customers and the NBFC

should ultimately develop customer orientation among all the personnel of the NBFC. Different

Marketing helps in achieving the organizational objectives of the NBFC. Indian NBFCs have

duel organizational objective – commercial objective to make profit and social objective which is

a developmental role, particularly in the rural area.

Marketing concept is essentially about the following few thing which contribute towards

NBFCs’ success:

1) The NBFC cannot exist without the customers.

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

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

4) It is also a way of organizing the NBFC. The starting point for organizational design

should be the customer and the NBFC should ensure that the services are performed and

delivered in the most effective way. Ultimate aim of a NBFC is to deliver total

satisfaction to the customer.

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

All the techniques and strategies of marketing are used so that ultimately they induce the

people to do business with a particular NBFC. Marketing is an organizational philosophy. This

philosophy demands the satisfaction of customers needs as the pre-requisite for the existence and

survival of the NBFC. The first and most important step in applying the marketing concept is to

have a whole hearted commitment to customer orientation by all the employees.

32

Marketing is an attitude of mind. This means that the central focus of all the activities of

a NBFC is customer. Marketing is not a separate function for NBFCs. The marketing function in

Indian NBFC is required to be integrated with operation.

Marketing is much more than just advertising and promotion; it is a basic part of total

business operation. What is required for the NBFC is the market orientation and customer

consciousness among all the personal of the NBFC. For developing marketing philosophy and

marketing culture, a NBFC may require a marketing coordinator or integrator at the head office

reporting directly to the Chief Executive for effective coordination of different functions, such as

marketed research, training, public relations, advertising, and business development, to ensure

customer satisfaction. Hence, the total marketing function involves the following:

a) Market research- i.e. identification of customer’s financial needs and wants

and forecasting and researching future financial market

needs and competitors’ activities.

b) Product Development- i.e. appropriate products to meet consumers’ financial

needs.

c) Pricing of the service- i.e., promotional activities and distribution system in

accordance with the guidelines and rules of the Reserve

NBFC of India and at the same time looking for

opportunities to satisfy the customers better.

Thus, it is important to recognize the fundamentally different functions that NBFC marketing

has to perform. Since the NBFCs have to attract deposits and attract users of funds and other

services, marketing problems are more complex in NBFCs than in other commercial concerns.

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ALL PRODUCTS OF IIFL FINANCE LTD.

Mutual Funds

A mutual fund is a company that pools the money of many investors to invest in a variety

of different securities. Investments may be in stocks, bonds, money market securities or

some combination of these. Those securities are professionally managed on behalf of the

shareholders, and each investor holds a pro rata share of the portfolio entitled to any

profits when the securities are sold, but subject to any losses in value as well.

For the individual investor, mutual funds provide the benefit of having someone else

manage your investments and diversify your money over many different securities that

may not be available or affordable to you otherwise. Today, minimum investment

requirements on many funds are low enough that even the smallest investor can get

started in mutual funds.

A mutual fund, by its very nature, is diversified – its assets are invested in many different

securities. Beyond that, there are many different types of mutual funds with different

objectives and levels of growth potential, furthering your chances to diversify.

Loan against Property

Need cash for business, children’s education, marriage or any personal use? Have some

property in your family or in your name? Would like to leverage your property without

giving it on rent or selling it?

IIFL brings to you Loan against property (LAP). You can now take a loan against your

residential or commercial property, to expand your business, plan a dream wedding, and

fund your child’s education and much more.

You can now depend on us to meet your entire business requirement even to purchase a

new shop or office for your business.

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Home Loan:

A new home brings with it new hopes, joys and emotions. At IIFL, we have shared new

hopes, joys and emotions with our customers. Every customer has a specific and unique

concern and our home loan product is customized to provide you solutions for your

unique concern. IIFL group has set up India Infoline Housing Finance Ltd. (IIHFL) to

offer highly customized facilities of availing Home Loans.

We believe that in order to succeed, we need to offer not only competitive products, but

also the best possible service and value-added features and benefits. In a market where

the basic product is largely similar, the differentiator is our ability to understand the

customer's need completely and structure the value-adds appropriately.

Wealth Management:

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

financial strategy based on a thorough understanding of the client's investment needs and

risk appetite. 

The IIFL Private Wealth Management Team of financial experts will recommend an

appropriate financial strategy to effectively meet your investment requirements.

Equity Research:

IIFL special research cell where some of India's finest financial analysts bring you

intensive research reports on how the stock market is faring, when is the right time to

Invest when to execute your order and more. IIFL make sure that investors are always

prepared to make own investment decision when the opportunity arises. IIFL bring you

intensive research reports - whether sectoral or company-wise or more - that tell you

exactly when and where to invest. So whenever there is an exciting investment

opportunity, you are in the know and always ready to invest.

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IIFL Health Care:

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

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

needs.

With 1.2 beds per 1000 population there is immense growth potential in this segment.

Growing incomes, literacy and awareness bode well for the Indian healthcare services

market. Considering that 80% of future Investment in Healthcare is expected to come

from Pvt Sector, we at IIFL see a lot of synergies between the Healthcare fraternity and

IIFL for mutual growth opportunities.

IIFL is extremely delighted to share that we are present in Healthcare Finance

Business.

National Pension Scheme:

National Pension System (NPS) is an initiative of Pension Fund Regulatory and

Development Authority (PFRDA), the apex body established by the Government of India

to regulate and develop the pension sector in India. “NPS-Lite Model” is designed to

ensure ultra-low administrative and transactional costs, so as to make investments of

smaller size possible.

Features of NPS Lite Scheme:

- Professional fund management

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

- Flexibility to decide your retirement age

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

withdrawn

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RESEARCH METHODOLGY

The study is based on survey technique. The study consists of analysis and Market Scoping

of Financial product of IIFL. For the purpose of the study 25 Customers are picked up and their

views solicited on different parameters. The methodology adopted includes.

Questionnaire

Random Sample Survey of Customers

Discussions with the concerned.

SOURCES OF DATA:

Primary Data: Questionnaire

Secondary Data: Published articles in newspaper, journals, magazines

SAMPLING PLAN:

Population: (Universe) Customers of IIFL

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

Sampling Methods: Non Probability Sampling

Sampling Procedure: Random Sampling Technique

Field Study: Directly approached respondents

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OPERATIONAL LEARNING

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

MONEY?

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

36%

14%24%

24%

2%

Emergency Requirement of Money

1 times 2 times 3 times 4 times 5 times 6 times

Here we can see that maximum number of clients i.e., 18 clients have emergency of

money only 1 time a year.

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Q) How do you manage when you require money?

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

24%

29%

34%

13%

How is the Money Managed?

Relatives Friends Loan Savings

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

money from Relatives.

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

39

a) Yes b) No

80%

20%

Are you aware about Gold Loan?

Yes No

Here, we can see that the maximum number of clients that is 80% are aware of the

concept of gold loan while in other hand only 20% are not aware about the concept of gold loan.

Q) Have you ever used Gold Loan Services?

40

a) Yes b) No

34%

66%

Have You Ever Used Gold Loan Services

Yes No

Here, we can see that maximum number of clients that is 66% hasn’t used gold loan

services and 34% of clients have used gold loan services.

Q) If Yes Which Company?

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

25%

19%38%

13%

6%

If Yes Which CompanyAbudaya Bait-Un-Nasar Muthoot HDFC IDBI

Here, we can see that maximum number of clients that is 37% have taken a loan from

Muthoot Finance Limited and so on.

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

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

Post Office

53%

10%

12%

5%

19%

Safest Form Of InvestmentBanks Savings Ac Insurance Real Estate Stocks And Shares Fixed Deposit

Post Office

Here, we can see that maximum number of clients that is 53% think that Bank Savings

Account as the safest form of investment and 20% think that fixed deposits are the safest form

and so on.

Q) What is your approximately Monthly Household Expenses?

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

2%

8%

28%

48%

14%

Monthly Household Expenses

>10,000 up to 15,000 up to 20,000 up to 25,000 above 30,000

Here, we can see that maximum number of client’s monthly household expenses is up to

Rs.25, 000 that is 48%, and 28% of client’s monthly expenses is up to Rs. 20, 000 and so on.

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

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1) Owned 2) Rented

74%

26%

House- Owned Or Rented

Owned Rented

Here we can see that 74% of client’s houses are owned and 26% of client’s houses are

rented.

Q) Have you taken any housing loan?

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1) Yes 2) No

34%

66%

Have you taken a Housing Loan?

Yes No

Here you can see that 66% of clients haven’t taken any Housing loan and only 34% of

clients have taken Housing loan.

Q) Have you made any provision for your Retirement?

46

1) Yes 2) No

52%48%

Have You Made any provision for your Re-tirement?

Yes No

Here you can see that 52% of clients have made provision for their Retirement and 48%

have not made any provision for their Retirement

LIMITATIONS

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Time limit is a major constraint

This research reflects on individual customer in Bandra West only. So findings and

suggestions is given on the basis of this research cannot be extrapolated to the entire

population.

Sample Size of the Questionnaire is 50 which is very small and which is not enough to

study the awareness of consumer of that particular above area.

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

find the right solution.

As per the company rules many information was not declared.

FINDINGS

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

LIMITED” says that the rate they charge is satisfactory.

Among all the respondents 80% are aware about different financial services provided by

IIFL and remaining 20% are not aware about the same.

IIFL Gold loan services is less preferred in the area of Bandra because they have less

awareness about their products and services

People want to invest their money in the bank savings account rather than insurance,

fixed deposits, or stocks and shares.

Most respondents have their annual income between Rs. 2 lakhs and Rs. 4 lakhs and from

them most of the people prefer for Bank Savings Account.

RECOMMENDATIONS AND SUGGESTIONS

49

Most of the people are not much aware of IIFL gold loan services and its benefit. So

INDIA INFOLINE FINANCIAL LIMITED can take general awareness of GOLD LOAN

SERVICES plan to the customers. INDIA INFOLINE should also maintain a customer

satisfaction standard.

There is a lack of new customer addition in the branches of IIFL, only existing

customer’s come to the respective branches for gold loan, so it is important to increase the

awareness about the financial products of IIFL in the respective area. Promotional activities

should be held for getting in more customers.

The company should increase their Exposure. It is the good tool to capture the market. To

increase awareness about GOLD LOAN SERVICES AND OTHER FINANICAL PRODUCTS,

and the name of the company itself, the company should organize campaign.

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

tool for customer addition.

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CONCLUSIONS

On the basis of the study it is found that India Infoline Ltd is a better service provider

than other NBFC’s because of their good service and personalized advice on gold loan and

financial investment product.

IIFL provides the faster services as well as relationship manager facility for

encouragement and protects the interest of the investors. It also provides the information through

the internet and mobile alerts.

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

IIFL gold loan services.

The company should also organize seminars and similar activities to enhance the

knowledge of prospective and existing customer, so that they feel more comfortable while

investing in the financial products

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BIBLOGRAPHY

www.indiainfoline.com

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

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

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

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

http://www.agloc.org/

www.mutualfundsindia.com

India Infoline Finance Limited Annual Report – 2014

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