rallied between 2-7% after RBI hiked the Loan-to-Value (LTV) ratio limit for gold loans below Rs 2.5 lakh, which will be revised to 85% from 75% as part of the latest norms.
Shares of Muthoot Finance, Manappuram Finance, and rallied upto 7%, 5%, and 5% respectively. is currently trading at Rs 2,440 up from day’s low of Rs 2,284. On the other hand, is trading at Rs 245 up from day’s low of Rs 233. And IIFL Finance is currently trading at Rs 449 up from day’s low of Rs 428.
The RBI Governor also clarified that small-ticket gold loans will not require credit appraisal, and end-use monitoring will be limited to loans under the Priority Sector Lending (PSL) category. These simplified norms aim to reduce paperwork, expedite processing, and ease compliance for lenders.
“There was nothing new in the draft norms on gold loans. We have consolidated all other norms. We have seen that some regulated entities were not following the norms because there was no clarity hence we have consolidated it. We will today or Monday morning release the final guidelines,” the Governor said.
Earlier, last week, the Ministry of Finance had recommended revisions to RBI’s draft directions on lending against gold collateral, including postponing the implementation. The Department of Financial Services (DFS) proposed that gold loans under Rs 2 lakh should be exempted from the proposed regulatory requirements. DFS stated that this step was required to ensure timely and speedy disbursement of loans for such small-ticket borrowers.