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.
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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.
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.
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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.
