Business

Buying pledged gold is now a lucrative business

AnyFans 2025-09-26

By G Naga Sridhar

Some people find it quite tough in clearing their gold loans. This could well make them lose the pledged gold altogether. In this process, they lose the true value of their gold.

Some gold buyers in the informal sector found a business opportunity in this problem. They are making an offer that is so tempting for those who are not in a position to clear their gold loans.

The pledged gold is valued at the market selling price on the day of transaction. After deducting the cost of releasing the gold from the pledge, the remaining balance will be paid to the customer on the spot. There will be processing fee and GST as applicable. The processing fee ranges from 4 to 6 per cent across different buyers and is also ‘negotiable’.

Loan process

The process is simple as adopted by DRU Gold, a private player with many branches in Telangana and Andhra Pradesh. “Our customers should have a PAN Card and address proof if the loan amount beyond ₹3 lakh. Our staff will accompany them to release pledged gold from any lender and settle the account on the spot,” a staffer at a DRU Gold branch here told businessline.

In a promo, KMK Gold Traders claims there is a ‘benefit’ in selling pledged gold, as it can provide cash to a gold loan customer facing an inordinate delay in repayment, helping save on interest and avoid the final loss of the pledged gold. Some are also offering pledged gold calculators on their portals to let customers know how much they can get.

There are takers for this offer. “I had to pay ₹3 lakh to release 30 gm pledged with an NBFC. When I approached a pledged gold buyer, one staffer came with me to release it and bought it later. I got ₹37,300 cash back,’‘ G R Rao of a pledged gold buyer said.

Growth drivers

The unabated surge in gold prices and the inability of some gold loan customers to repay are driving the trend, according to Ramachari, owner of Chari Pledged Gold buyers. “We make some gain by way of transaction fees. But the bigger gain is our investment in gold as the price is escalating. There is a gain for customers too as instead of losing entire gold, they can get some cash in the current scenario,’‘ he said.

The non-performing assets (NPA) in gold loans in NBFCs are also on the rise. As per government data, NBFCs reported 2.14 per cent NPAs in March 2025 from 1.21 per cent in March 2023.

Most of the pledged gold buyers are operating under pawn broker (money-lender) registration while some of them are operating with local trade licences and claim to be registered with Bureau of Indian Standards.