What are Electronic Gold Receipts

What are electronic gold receipts and how do they work?

Gold has always been a trusted asset in India, whether you see it as jewellery or a safe investment. When you buy gold, proof of ownership and purity is important, and that is where a gold receipt comes in. Today, electronic gold receipts have made this process simpler by moving gold ownership into a digital format, offering better security and transparency.

Electronic Gold Receipts, or EGRs, allow you to own physical gold without actually holding it. When you purchase an EGR, the matching quantity of gold is stored safely in a secure vault by an authorised custodian. You can trade these receipts on exchanges like shares or convert them back into physical gold when needed. This system removes storage worries, improves liquidity, and gives you a convenient way to invest in gold.

Benefits of electronic gold receipts

Electronic Gold Receipts offer several advantages over physical gold ownership. Firstly, they eliminate the need for physical storage, as your gold is safely held in a secure vault by a trusted custodian. This removes the risk of theft or loss. Secondly, EGRs are highly liquid, allowing you to trade them easily on the exchange without the complications involved in physically selling gold. Thirdly, they provide transparency in pricing since the rates are derived from the market and not influenced by individual dealers. Additionally, EGRs enable smaller investments as they can be purchased in smaller denominations than physical gold. This opens up the gold market to more investors. Finally, they are cost-effective, as there are no making charges or wastage costs typically associated with gold jewellery or coins.
 

Traditional gold receipts vs. electronic gold receipts

Traditional gold receipts and Electronic Gold Receipts (EGRs) differ significantly in how they operate. Here is a simple comparison to help you clearly understand how traditional gold receipts differ from electronic gold receipts.

How do electronic gold receipts streamline the gold loan process?

Electronic Gold Receipts (EGRs) have simplified the gold loan process in several ways. Traditionally, obtaining a gold loan involved physically presenting the gold to the lender, followed by a valuation process. With EGRs, this step is entirely eliminated as the gold is already secured in a custodian's vault. Lenders can instantly verify the value of your EGRs, and since the gold is securely stored, the risk for the lender is reduced. This allows for quicker loan approvals and disbursals. EGRs also eliminate the need for transporting physical gold, reducing costs and the risk of theft. In addition, as EGRs are digitally traded, they allow for seamless pledging of gold for loans, making the process faster and more efficient. Overall, EGRs make the gold loan process less cumbersome and more secure.

Please note, Bajaj Finance only offers gold loan against 18-22 karat physical gold. Check your gold loan eligibility in seconds to know how much you can borrow—easy, accurate, and hassle-free.
 

Navigating gold loans with and without gold receipts

Gold loans can be navigated differently depending on whether you have gold receipts or not. With a physical or electronic gold receipt, securing a loan becomes much simpler. The receipt provides proof of ownership, and the lender can verify the gold’s value easily, speeding up the loan process. It also reduces the need for physically handling or transporting gold, making the loan process more secure and less risky. Without a gold receipt, obtaining a gold loan can be more time-consuming. The lender will require a physical valuation of the gold, and the absence of proper documentation could complicate or delay the approval process. You may also need to transport your gold to the lender’s premises, which increases risks related to safety and theft. Therefore, having a gold receipt simplifies the procedure.
 

How to obtain a gold loan with an electronic receipt?

Obtaining a gold loan with an Electronic Gold Receipt (EGR) is a straightforward process. The first step is to ensure your EGR is valid and stored with a recognised custodian. Once you have a valid EGR, approach a lender that accepts EGRs for gold loans. The lender will verify the details of your EGR, including the quantity and value of the underlying physical gold. As the gold is already stored securely in a vault, there is no need for additional valuation or security checks, speeding up the approval process. The lender will then offer you a loan amount based on the current market value of the gold. Once you agree on the terms, the loan will be disbursed quickly, often within the same day. The EGR remains pledged with the lender until the loan is repaid.

Need money for a medical emergency or education? Check your gold loan eligibility and get funds without any hassle.
 

What to do if you don't have a receipt for your gold?

• Obtain a valuation: If you don’t have a gold receipt, take the gold to a jeweller or bank for a proper valuation.
• Find a lender: Look for lenders who offer loans based on physical gold without the need for a receipt.
• Negotiate terms: Without a receipt, you may face more scrutiny, so be prepared to negotiate interest rates and loan terms.
• Consider a third-party certifier: If needed, some lenders may accept certification from a trusted third-party evaluator.
• Store your receipt safely next time: Keep any future receipts securely for easier loan applications in the future.