Commercial Bank to take ‘Gold Loans’ countrywide

The Commercial Bank of Ceylon has announced plans to extend its ‘Gold Loans’ facility to its widespread branch network island-wide, to offer the masses an opportunity to use their gold to mobilise funds with one of the country’s most stable financial institutions.

The bank has already enabled 108 branches with the necessary infrastructure and deployed specially trained staff to offer ‘Gold Loan’ facilities to customers. Commercial Bank plans to offer the ‘Gold Loans’ facility through its entire network of branches except supermarket banking units by August this year.

This new thrust into ‘Gold Loans’ is backed by a commitment to offer up to 80 per cent of the gold value, in the form of jewellery, biscuits or bars, and a lower-than-average interest rate of 14 per cent per annum (1.16 per cent per month) on the advances, Commercial Bank’s Assistant General Manager (Personal Banking) Vimal Fernando said.

“We believe this is the opportune time for a bank of the stature and presence of Commercial Bank to expand customer access to this product,” Fernando said, pointing out that gold prices continue to appreciate, offering an opportunity for idle gold to be utilised to raise funds, while at the same time securing safe storage courtesy of the bank.He said the bank was equipping an average of 18 new branches each month to offer ‘Gold Loans’ and had achieved a five-fold increase in the value of advances through this facility over the last two years.

Branches offering ‘Gold Loans’ are provided with a separate, dedicated cubicle to protect the privacy of customers and are supplied with the best equipment in the market to test and weigh gold, Fernando said. The units are staffed by personnel trained by industry experts to advise and serve customers.

The minimum advance offered by Commercial Bank as a ‘Gold Loan’ would be Rs. 10,000, making the facility viable for a wide segment of the populace, he said. A choice of terms of six months or one year for repayment and redemption of the gold would be available to customers.

Although a relatively late entrant in to the market for gold loans, Commercial Bank expects to make rapid progress in this sphere on the basis of its impeccable reputation for financial strength and stability, and its 198 strong branch network in Sri Lanka, Fernando added.

In July last year, Commercial Bank also launched an innovative overdraft facility that could be secured by gold or gold jewellery over 18kt deposited with the bank.

Targeted at businessmen and high-earning executives, the ‘Gold OD’ facility is designed to provide access to funds for short term investments or for bridging finance, and can be operated for a year or extended if required.