Gold loan stocks like Muthoot Fin, Manappuram rally up to 4% as RBI eases lending norms; NBFCs eye growth revival, margin expansion
ADVERTISEMENT Shares of Muthoot Finance rose as much as 3.3% to Rs 2,527 on the BSE, Manappuram Finance gained 2.5% to Rs 253.90, and IIFL Finance jumped 4.4% to Rs 470.90 in intraday trade.
The new RBI norms, effective April 2026, raise the LTV cap for gold loans below Rs 2.5 lakh to 85% and exempt these loans from mandatory credit appraisal requirements. End-use monitoring will also be limited to loans qualifying as Priority Sector Lending (PSL), with an emphasis on faster processing and reduced paperwork.
'There was nothing new in the draft norms on gold loans. We have consolidated all other norms... we will today or Monday morning release the final guidelines,' said RBI Governor Sanjay Malhotra following the policy announcement.The final guidelines also formalize valuation norms, renewal conditions, audit protocols, and auction processes for gold collateral, placing NBFCs, banks, and small finance banks on a level playing field.
ADVERTISEMENT According to Motilal Oswal, the final gold lending guidelines are 'milder' than the draft version and pose only a 'marginal near-term impact' on disbursement LTVs for gold loan NBFCs.'This is positive for gold loan NBFCs, particularly Muthoot Finance, which had borne the maximum brunt of the earlier draft,' the brokerage noted. While regulatory arbitrage for NBFCs will reduce, they can manage disbursement levels by tweaking loan structures and repayment schedules.
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Emkay Global echoed similar optimism, calling the new RBI policy a 'blockbuster sequel.' The brokerage highlighted that the combination of a 50 basis point repo rate cut, simplified gold loan norms, and relaxed qualifying asset criteria reflects the RBI's confidence in NBFC sector stability.'Now the ball is in NBFC lenders' court to drive risk-calibrated profitable growth,' Emkay said.
ADVERTISEMENT The brokerage expects net interest margins (NIMs) for NBFCs to expand starting Q1FY26, driven by lower funding costs—especially for lenders with fixed-rate loan books like gold and vehicle financiers.The regulatory easing is expected to revive loan demand in the gold loan segment, with banks and NBFCs now operating under harmonized rules. This could raise competitive intensity, particularly for NBFCs that previously benefited from more flexible LTV limits.
ADVERTISEMENT Emkay observed that gold loans and loans against property (LAP) are already showing improved traction in Q1FY26, even as home and vehicle finance segments remain subdued. With the regulatory overhang lifted and interest rate tailwinds in place, gold loan lenders are now expected to focus on defending market share and improving profitability.Overall, the RBI's actions are seen as accommodative and growth-oriented, supporting a bullish medium-term outlook for gold loan players—especially as systemic risks recede and operational clarity improves.
Also read | Bank, auto stocks drive Sensex over 400 pts higher, Nifty tops 25,100
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