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Hans India
2 days ago
- Business
- Hans India
RBI to raise gold loan-to-value ratio to 85 pc for small borrowers
Mumbai: Reserve Bank Governor Sanjay Malhotra on Friday said the central bank will raise the Loan-to-Value (LTV) ratio for gold loans to small borrowers of up to Rs 2.5 lakh to 85 per cent from the existing 75 per cent. Speaking at a press conference after the monetary policy meeting, he said the final regulations on gold loans will be announced today or latest by Monday. The increase in the loan-to-value ratio for small loans means that if the gold pledged is worth Rs one lakh, borrowers can get up to Rs 85,000 as a loan, up from Rs 75,000. The move is expected to make it easier for households and small businesses to access funds. Malhotra also said that credit appraisal requirements will be removed for small-ticket loans, to make things easier for borrowers. Additionally, end-use monitoring will only be mandated if the loan qualifies under the Priority Sector Lending (PSL) norms. The easing of norms comes in the backdrop of the Finance Ministry's suggestion last week that the Reserve Bank should exclude small borrowers of up to Rs 2 lakh from the provisions of its draft directions on lending against gold collateral. The Finance Ministry has also suggested that the implementation of the guidelines be postponed to next year. 'The draft directions on lending against gold collateral issued by the RBI have been examined by the Department of Financial Services (DFS) under the guidance of Finance Minister Nirmala Sitharaman. The DFS has given suggestions to the RBI to ensure that the requirements of the small gold loan borrowers are not adversely affected,' the Finance Ministry had said. DFS has also stated that such guidelines will need time to implement at the field level and hence may be suitable for implementation from 1st January 2026 only, the statement said. Further, DFS has suggested that small ticket borrowers below Rs 2 lakh may be excluded from the requirements of these proposed directions to ensure timely and speedy disbursement of loans for such small ticket borrowers, the statement explained. 'RBI is reviewing the feedback received on the Draft guidelines. It is expected that concerns raised by various stakeholders, as well as the feedback received from the public, will be duly considered by the RBI before finalising the directions on the same. The suggestions have been duly forwarded to the RBI, the statement, issued on May 30, added.
Time of India
2 days ago
- Business
- Time of India
Gold loan stocks rally after RBI hikes loan-to-value ratio limit and eases small loan norms
Gold loan stocks 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 IIFL Finance rallied upto 7%, 5%, and 5% respectively. Muthoot Finance is currently trading at Rs 2,440 up from day's low of Rs 2,284. On the other hand, Manappuram Finance 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. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like War Thunder - Register now for free and play against over 75 Million real Players War Thunder Play Now Also Read | RBI slashes rates by 50 bps: What it means for debt mutual fund investors 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. Live Events 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. Reserve Bank of India has slashed down the repo rate by another 50 basis points to 5.50% and announced a 100 basis point CRR cut. Also Read | Nilesh Shah praises RBI's bold rate cut, says even Trump may urge Fed to follow This is the third consecutive rate cut by RBI in the current calendar year and the second one in the current financial year. This marks the third consecutive cut under Governor Malhotra. In February and April, the apex bank had reduced the repo rate by 25 basis points each. Before this, the repo rate was held at 6.5% for 11 consecutive meetings. 'Core inflation remained largely steady and contained during March-April, despite increase in gold prices exerting upward pressure,' Governor said in his policy statement.
Business Upturn
2 days ago
- Business
- Business Upturn
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.
Business Upturn
2 days ago
- Business
- Business Upturn
Manappuram Finance shares rise 3% as RBI revises LTV to 85% for small gold loans
By Aditya Bhagchandani Published on June 6, 2025, 12:40 IST Shares of Manappuram Finance Ltd climbed 3% to ₹240.56 on Friday after the Reserve Bank of India (RBI) announced a key revision in gold loan regulations. RBI Governor Sanjay Malhotra stated that the loan-to-value (LTV) ratio will be increased from 75% to 85% for gold loans up to ₹2.5 lakh per borrower, inclusive of the interest component. The stock opened at ₹234.58 and touched an intraday high of ₹242.58 before settling around ₹240.56, gaining ₹5.98 from the previous close. Manappuram's market capitalization stood at ₹204.33 billion, with a strong average volume of 4.68 million shares. Additional measures announced by the RBI include eliminating the need for credit appraisals for small gold loans and requiring end-use monitoring only under Priority Sector Lending (PSL). Final guidelines on the new gold loan regulations are expected today or by Monday. The announcements came as part of the RBI's broader policy update, which included a 50 bps repo rate cut to 5.5%, a CPI inflation revision for FY26 to 3.7%, and a maintained GDP growth forecast of 6.5%. These changes are expected to improve lending conditions and benefit key gold loan financiers like Manappuram. 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.
Business Upturn
2 days ago
- Business
- Business Upturn
IIFL Finance shares rise nearly 4% as RBI revises LTV revision to 85% from 75% for gold loan financiers
By Aditya Bhagchandani Published on June 6, 2025, 12:42 IST Shares of IIFL Finance Ltd gained 3.84% to ₹445.70 on Friday after the Reserve Bank of India (RBI) announced significant regulatory relief for small gold loans. RBI Governor Sanjay Malhotra confirmed that the loan-to-value (LTV) ratio will be increased to 85% from 75% for gold loans up to ₹2.5 lakh per borrower, inclusive of interest. The stock opened at ₹429.20 and touched a high of ₹452.45 during the session, supported by strong volumes of 1.75 million shares. IIFL's market capitalization stood at ₹189.61 billion, with a P/E ratio of 51.12. In addition to the LTV revision, the RBI also stated that credit appraisal requirements will no longer apply for gold loans below ₹2.5 lakh. Moreover, end-use monitoring will only be necessary under the Priority Sector Lending (PSL) framework. The final guidelines are expected to be released today or by Monday. The announcement is part of the RBI's broader policy update, which included a 50 basis point repo rate cut to 5.5%, a downward revision in CPI inflation to 3.7% for FY26, and a maintained GDP growth forecast of 6.5%. These changes are expected to boost credit availability and reduce compliance burdens, especially for gold loan-focused NBFCs like IIFL. 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.
