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Manappuram Fin,Muthoot Fin tank 20%

RBI has tightened rules for lending against gold by NBFCs.

Written by Agencies | New Delhi | Published: March 22, 2012 2:07 pm

Stocks of gold finance firms – Manappuram Finance and Muthoot Finance — slumped by up to 20 per cent on the bourses today,after the Reserve Bank of India tightened rules for lending against gold by non-banking finance companies (NBFCs).

Muthoot Finance tanked by 20 per cent to a lifetime low of Rs 130.30 on the BSE,while Manappuram Finance plunged by 15 per cent to a low of Rs 38.55.

“It has been decided that all NBFCs shall hereafter maintain a loan-to-value (LTV) ratio not exceeding 60 per cent for loans granted against the collateral of gold jewellery,” RBI said in a notification yesterday.

Tightening norms for NBFCs that are engaged in gold loan business,RBI said that they are predominantly involved in lending against the collateral of gold jewellery and have recorded significant growth in recent years both in terms of size of their balance sheet and physical presence.

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