Ashok Leyland to Samvardhan Motherson: Auto stocks rise after 50 bps repo rate cut in RBI MPC meeting
Stock Market Today: Ashok Leyland to Samvardhan Motherson, the Auto stocks saw a sharp rise after the 50 bps repo rate cut announced in RBI MPC meeting. The rate sensitive Auto stocks got a tailwind as the reduces lending rates could spurt sales of Passenger Vehicles, Two wheelers, commercial vehicles etc Nifty Auto index gained near 1%.
The Nifty Auto Index opened at 23,343.05 almost 1.6% higher than the previous days closing price of - 23,306.206 in anticipation of some rate cat announcement by the Reserve Bank of India as it announced the RBI MPC otcome.
However the RBI governor made a surprise repo rate cut by 50 basis point coupled with CRR or cash reserve ratio or CRR cut by 100 bps
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Business Standard
4 hours ago
- Business Standard
RBI to raise gold lending LTV to 85% for loans under Rs 2.5 lakh
The Reserve Bank of India (RBI) on Friday increased the loan-to-value (LTV) ratio on gold loans up to Rs 2.5 lakh to 85 per cent per borrower, up from the 75 per cent proposed in the draft norms issued in April this year. For gold loans more than Rs 2.5 lakh and up to Rs 5 lakh, the LTV ratio has been set at 80 per cent. For loans more than Rs 5 lakh, the central bank has set an LTV of 75 per cent. The RBI said that the new norms will come into effect from April 1, 2026.
The Print
4 hours ago
- The Print
RBI raises LTV ratio for small ticket loan against gold
LTV ratio on a day means the ratio of the outstanding loan amount to the value of the pledged eligible collateral as on that day. In case of bullet repayment loans, however, the LTV calculation shall take into account the total amount repayable at maturity. The LTV ratio has been fixed at 80 per cent for loan amounts between Rs 2.5 lakh and Rs 5 lakh and 75 per cent for loans above Rs 5 lakh, said the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025. Mumbai, Jun 6 (PTI) The RBI on Friday raised the loan-to-value (LTV) ratio for lending against gold to 85 per cent for borrowings under Rs 2.5 lakh from the present 75 per cent, and spelt out other conditions with an aim to regulate the category in a better way with minimum risk. It further said a lender shall not extend a loan where ownership of the collateral is doubtful. 'A suitable document or declaration shall be obtained from the borrower in all cases to the effect that the borrower is the rightful owner of the eligible collateral,' according to the latest directions. Further, multiple or frequent sanction of loans against eligible collateral to the same borrower, aggregating to a value in excess of a threshold to be decided by the lender, must be examined closely as part of the transaction monitoring under the anti-money laundering (AML) framework. According to the directions, a lender should not grant any advance or loan against primary gold or silver or financial assets backed by primary gold or silver, like, units of Exchange-traded funds (ETFs) or units of mutual funds. The RBI said the aggregate weight of ornaments pledged for all loans to a borrower shall not exceed 1 kilogram for gold ornaments, and 10 kilograms for silver ornaments. The aggregate weight of coin(s) pledged for all loans to a borrower shall not exceed 50 grams in case of gold coins, and 500 grams in case of silver coins. 'Gold or silver accepted as collateral shall be valued based on the reference price corresponding to its actual purity (caratage),' RBI said. A lender will have to release or return the pledged eligible collateral held as security to the borrower(s)/ legal heir(s) on the same day but in any case, not exceeding a maximum period of seven working days upon full repayment or settlement of the loan. A few months ago, the RBI had come out with a draft on gold lending, and Malhotra made it clear that the draft is just a reiteration and consolidation of all the regulations issued earlier. Earlier in the day, RBI Governor Sanjay Malhotra said among other facets, the new gold loan rules will also give clarity on the ownership and include the facility for a self-declaration from the borrower in case he is unable to furnish receipts of the purchase. It will do away with the need for credit appraisal for loans of up to Rs 2.5 lakh where gold is a collateral, he said. The end-use monitoring of loans will be compulsory only if a lender is taking advantage of a loan by classifying it as among priority sector lending, the governor said. The RBI said the directions have to be complied with as expeditiously as possible but no later than April 1, 2026. Loans sanctioned prior to the date of adoption of the directions by the RBI regulated entities will continue to be governed by the extant guidelines applicable. PTI NKD CS TRB This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
The Hindu
5 hours ago
- The Hindu
RBI's gold loan direction brings clarity, standardisation, greater consumer protection, says Manappuram Finance MD
'The 'Lending Against Gold and Silver Collateral Directions, 2025' notified by the Reserve Bank of India (RBI) on Friday has brought clarity, standardisation, and greater consumer protection to the gold and silver loan segment, said V. P. Nandakumar, Managing Director and CEO of Manappuram Finance Ltd. 'The guidelines on valuation, assaying, and loan-to-value (LTV) ratios are timely and progressive. In particular, the provision allowing a maximum LTV ratio of 85% for loans amount up to ₹2.5 lakh. It will significantly benefit small-ticket borrowers,' he said. Stating that the new directions have consolidated and replaced earlier circulars, he said these have create a uniform code applicable to all regulated entities, including NBFCs, banks, and cooperative institutions. 'These guidelines aim to promote transparency, ethical practices, and prudential discipline while enhancing financial access for individuals and micro-enterprises,' he said. Highlighting that the continued eligibility of gold jewellery, ornaments, and coins as collateral reflected the RBI's recognition of the critical role of gold loans in meeting short-term liquidity needs, he said the standardised assaying process—mandating borrower presence and use of reference prices from the Indian Bullion and Jewellers Association (IBJA) or SEBI-regulated exchanges—would foster uniformity across the industry. 'Manappuram Finance has long adhered to rigorous valuation norms, and we view this framework as an endorsement of our transparent and ethical lending model,' he emphasised. On the revised LTV guidelines, Mr Nandakumar said, 'The RBI has prudently capped LTVs at 85% for loans up to ₹2.5 lakh, 80% for loans between ₹2.5 and ₹5 lakh, and 75% for loans above ₹5 lakh. These thresholds strike a balance between borrower access and systemic stability. We are fully aligned with these stipulations and will implement them rigorously.' Regarding bullet repayment loans, he acknowledged the RBI's cap of 12 months for such loans, with renewals allowed only upon creditworthiness and interest repayment. On the customer conduct and protection norms, he said, 'The emphasis on clear documentation, borrower communication, and transparent auction procedures aligns with our customer-first approach. We already involve borrowers in the assaying process and provide detailed disclosures in loan agreements, and these practices will continue.' On collateral management, he said, 'We place the utmost importance on secure storage, stringent internal audits, and surprise verifications. The RBI's directives reinforce our long-standing commitment to safeguarding customer assets.' Welcoming the RBI's provisions for fair compensation in the event of loss, damage, or delayed return of pledged assets, and its emphasis on disbursing loans directly into verified bank accounts in compliance with KYC and Income Tax Act provisions, he said' These directions reflect the regulator's focus on integrity, accountability, and customer rights. 'We are fully prepared to implement the new guidelines well ahead of the April 2026 deadline. We believe this framework will further bolster public trust in gold loans as a reliable and responsible source of credit,' he stated.
