Muthoot Finance shares spike 7% after RBI revises LTV revision to 85% from 75% for gold loan financiers
Shares of Muthoot Finance Ltd surged 6.72% to ₹2,448.80 on Friday after RBI Governor Sanjay Malhotra announced key changes in gold loan regulations during the Monetary Policy Committee (MPC) address.
Among the major regulatory changes: No credit appraisal will be required for gold loans up to ₹2.5 lakh per borrower
End-use monitoring will only be mandated under Priority Sector Lending (PSL)
Loan-to-value (LTV) ratio for small gold loans will be reduced to 85%, including the interest component
These relaxations are expected to ease operational burdens and improve credit accessibility for middle- and lower-income segments that heavily depend on gold-backed financing.
The announcement came alongside the RBI's policy decision to cut the repo rate by 50 basis points to 5.5%, its third consecutive reduction. The CPI inflation outlook for FY26 was revised to 3.7%, while the GDP growth forecast was retained at 6.5%.
Muthoot Finance, a key player in India's gold loan market, rallied from its previous close of ₹2,294.60, recording an intraday high of ₹2,448.80 with strong volume activity. With a market cap nearing ₹945 billion, the stock has become a central beneficiary of the revised norms.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
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