Piramal Finance to Expand into Gold Loans and Co-Branded Credit Cards

Piramal Finance to Expand into Gold Loans and Co-Branded Credit Cards

Piramal Finance is set to expand its lending portfolio by entering the gold loan and co-branded credit card segments. This move is part of the company's strategy to diversify its offerings. According to Jairam Sridharan, Managing Director of Piramal Finance, the company anticipates that the share of housing loans and loans against property (LAP) in its retail assets under management (AUM) will decrease from 70% to 60% over the next three to four years as it focuses more on used car finance, personal loans, and business loans.

Currently, Piramal Finance does not have a gold loan business, but the company aims to enter the segment in the coming quarters. The decision comes as the Reserve Bank of India (RBI) raises concerns about guideline violations in the gold loan sector. Piramal Finance has stated that it will comply with all regulatory requirements and implement a strong governance structure before launching its gold loan services.

In addition to gold loans, the company will introduce co-branded credit cards aimed at salaried customers. With the entry into these new segments, the share of housing loans and LAP will gradually decrease.

As of June 2024, Piramal Finance's retail AUM stood at Rs 50,530 crore, with housing loans accounting for 45% and LAP for 25%. Sridharan emphasized that the company aims to build a diversified lending business by continuously launching new segments, though it has no plans to enter the new car financing market, focusing instead on used car finance.