Beefing Up Security With Increased Gold Loans

As gold loan financing becomes increasingly popular, it's essential to understand the security risks and how to mitigate them. This guide provides tips and strategies to strengthen security when dealing with gold loans!

1 Apr,2023 11:18 IST 2068
Beefing Up Security With Increased Gold Loans

Over the past few years, there has been an ever-increasing tendency among people to use their gold to meet their liquidity needs. The high value of this tangible asset allows common people in possession of gold to get secured loans against gold jewellery from a large number of banks and non-banking finance companies (NBFCs).

What benefits the borrowers the most is that the loan comes at a lower rate of interest when compared with credit cards or personal loans and with more flexible gold loan repayment. The interest on the loan can be paid monthly, quarterly, half-yearly or annually.

With an increase in the gold loan transactions to a new high, banks and NBFCs have a major responsibility to keep the pledged gold of the customers safe and secure. Since a few instances of bank robbery in some parts of the country have come to light, there is concern among consumers about the safety of their valuables. This brings us to an important question about the levels of safety infrastructure of the banks and NBFCs.

Safety Measures

The fundamental level of safety net includes security cameras and surveillance systems. Since banks and NBFCs experience a high footfall during the working hours it is imperative for them to install security cameras across all transaction areas. There are also a few intelligent security cameras with advanced features like vibration, smoke, heat detection etc. that are available in the market.

Video surveillance systems at multiple sites are useful in monitoring customer as well as staff activities. It can be the first line of defence for lenders as it helps to identify any type of suspicious behaviour. In case of robbery or fraud, the surveillance footage can be used as evidence to identify and capture images of offenders, thereby tracking down suspects.

Additionally, banks must have a proper IP surveillance for remote monitoring of live and archived video footage from any computer. Also, it is good to have a cloud-based security management system to prevent data and video recordings from being manipulated or damaged during mishaps like fire outbreaks.

Another important aspect of e-surveillance for banks is the technology-driven surveillance systems that integrate bank security cameras with alarm systems into a single network. It is a very resourceful tool for fighting threats. Some other must-have bank surveillance solutions include night vision functionality that supervises activities after the regular business hours of the bank.

Get Gold Loan at the comfort of your home
Apply Now

The final safeguard for customer valuables is the safe that has the lockers within which the gold is stored. Since even burglars are using advanced tools, it is essential for banks to have a highly secured and strong safe room. It includes a fortified room having thick walls and ceiling and a strong door. So, even if a burglar is able to breach the initial levels of the bank’s security, the safe room holding the lockers must be strong enough to guard itself.

Need Of The Hour

Since customers and their valuables form the heart of business for gold loan companies, safety and trust are the foremost concerns. The rise in security threats has driven banks to prioritise the adoption of advanced techniques.

A working committee set up by the Reserve Bank of India (RBI) a few years ago in its guidelines urged banks to beef up security and upgrade strong room doors. While installation of surveillance and alarm systems is unquestionable, putting up advanced solutions such as intelligent safes, built-in sensors that would trigger off alarms at times of security breach, etc. in place can keep the banks on a strong footing.

Unfortunately, it is not possible in many of the old bank branches built in the 1980s or 1990s.

Conclusion

Gold loans are a great choice for borrowers in exchange for their gold jewellery that otherwise would lay idle in the lockers. In fact, it is one of the best options to meet a short-term cash crunch and is thus, ideal for both business people and salaried folks.

However, before planning a gold loan one must double check the credibility of the lender as it involves pledging the precious jewellery with them. As such there is no harm in cross-verifying the customer reviews and safety measures of the lender for the security of the pledged gold. Consequently, from the lender's perspective there is a growing need to boost the security infrastructure of banks. Failure to do so can severely damage business.

When it comes to opting for gold loans, it will be wise to choose a reliable institution such as IIFL Finance. You can fulfill all your personal or business requirements with IIFL Finance gold loans. For the ease of its customers, IIFL Finance offers a simple loan application process. Most importantly, IIFL Finance keeps the gold jewellery safe in secured vaults to ensure there is absolutely no chance of damage to your precious ornaments.

Get Gold Loan at the comfort of your home
Apply Now

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

Most Read

Check the Difference Between 24k and 22k Gold
9 Jan,2024 09:26 IST
52450 Views
Like 6243 6243 Likes
Franking and Stamping: What’s the difference?
14 Aug,2017 03:45 IST
46641 Views
Like 7682 7682 Likes
Why Gold Is Cheaper In Kerala?
15 Feb,2024 09:35 IST
1859 Views
Like 4208 1802 Likes
Personal Loan With Low CIBIL Score
21 Jun,2022 09:38 IST
29029 Views
Like 6492 6492 Likes