Indian gold loan companies witnessed a sharp rise in stock prices after RBI Governor Sanjay Malhotra confirmed that final gold loan regulations will be announced soon. The market reacted positively to the clarification that the new rules aim to harmonize lending practices rather than tighten regulations.
Stock Market Reaction:
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Shares of Muthoot Finance, Manappuram Finance, and IIFL Finance surged following the RBI’s statement.
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Muthoot Finance stock jumped 7.29%, while Manappuram Finance and IIFL Finance also saw gains.
RBI’s Regulatory Stance:
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The RBI clarified that gold loan regulations will focus on standardizing lending norms across banks and NBFCs.
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The Loan-to-Value (LTV) ratio remains capped at 75%, ensuring borrower protection and financial stability.
Government Intervention:
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The Finance Ministry has recommended exempting loans below ₹2 lakh from stricter regulations, protecting small borrowers.
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The new rules are expected to be implemented from January 1, 2026, allowing lenders time to adjust.
Industry Impact:
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Gold loan NBFCs welcomed the move, stating that harmonization will create a level playing field.
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Analysts predict continued growth in the gold loan sector, driven by rising gold prices and strong demand.
Strategic Outlook:
With final regulations expected soon, the gold loan industry is poised for stability and growth, ensuring borrower protection and market transparency.
Source: Indian Express, The Hindu, Business Standard.