George Alexander Muthoot, the managing director of Muthoot Finance, is of the view that his company knows the business of lending against gold better than most: “We work closely with our customers and understand their needs better. I have not seen signs of stress in our business.” What he will not say explicitly is that this may not hold true for banks. He limits himself to a cryptic, “We do it better than them.” And therein lies a tale.
Gold loans have surged nearly 85 per cent over the past year, to Rs 60,464 crore. The trigger is the Covid-19