Mortgagers say gold loan firm ‘cashing in’ on thefts

Mohit Khanna

Tribune News Service

Ludhiana, May 24

A number of robbery incidents have taken place at the offices of Muthoot Finance, the country’s one of the leading gold loan providers. One such incident took place in Patiala last week.

In most cases, the robbers were held, but those who have taken loan mortgaging their gold with the company are struggling to get their property back. While the company says the ornaments are lying in the “malkhana” as case property, its clients are at the receiving end.

They allege it is a win-win situation for the company since it will keep earning interest on the loan amount and in case they stop paying the interest the company will seize their gold.

They blame lax security of the financial institution for repeated robberies and thefts and have demanded a high-level probe into the recent cases.

They say they would seek criminal action against the company as it is the obligation of Muthoot to return their gold which they have mortgaged with it and not sold.

SK Gupta, a chartered accountant and a resident of Udham Singh Nagar, said he took a loan of Rs3.5 lakh against gold from Muthoot Finance in March 2008.

“I mortgaged 615 gm of gold. In May, a theft took place in its office where the company’s staff was involved. The police cracked the case within 24- hours and recovered 21.72 kg of gold and Rs2.7 lakh from the accused.”

He said a few months later when he went to get his gold back, he was shocked to hear that the recovered gold had been submitted as a case property with the court.

More than 500 local residents had mortgaged their gold with the company. The gold recovered from the thieves was verified by the customers in the presence of the officials as the packets were intact. “When I availed the loan, the price of gold was around Rs15,000 per 10 gm. Now, it is over Rs28,000. I am unable to find a way out of the situation,” said Gupta.

Sandeep Kumar, another resident, said the accused caught in a theft case were granted bail. “The company did not file an appeal in the high court nor our gold has been returned,” he said.

“I visited the company’s office soon after the theft took place and offered to settle the matter, but the then manager told me that they cannot do anything till the court proceedings are on. The company had intimated us about the theft, but there has been no communique since then,” he said.