Manappuram Finance has dipped 7% to Rs 33.80, extending its 20% fall in past two trading days, after the Reserve Bank of India (RBI) tightened rules for lending against gold by finance companies.
The central bank on last Wednesday tightened rules for lending against gold by finance companies, saying the rapid growth in such loans in the past few years had increased risks to the banking system and retail investors.
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The move to restrict loans by gold finance firms to 60% of the value of jewellery pledged as collateral may have a huge impact on the revenue of gold loan-lending firms such as Manappuram Finance and Muthoot Finance, according to the analyst.
A combined 3.39 million shares have changed hands so far on the Manappuram Finance counter. Muthoot Finance, on the other hands, is trading lower by 3% at Rs 143 on the National Stock Exchange.