George Alexander Muthoot , MD, Muthoot Finance, said, "We are dealing in a commodity which is only becoming more attractive. We often come across such instances where people pledges fake gold, stolen or low quality gold with us. Whenever possible, we recover the amount, otherwise we just have to bear the losses," as reported by The Economic Times.
The number of institutions offering gold loans is pitching up and the companies feel this results in proportionate rise in possibilities of fraud as bigger crowd is now aware of gold loans. Unnikrishnan Manappuram, MD, Manappuram Finance, another well-known player in the gold loan business said, "Earlier if there was one case of fraud in the 30,000 people we gave loans to, today it is one in every 10,000 cases that we see discrepancies