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Muthoot Finance Limited (MFL) has welcomed the RBI's announcement to increase loan-to-value (LTV) ratio to 75 per cent from the present 60 per cent.
In March 2012, the RBI had capped the LTV ratio and asked NBFCs to extend loans up to 60 per cent of the value of household gold jewellery.
MG George Muthoot, chairman, Muthoot Finance, said the move by the apex regulatory body would help the cause of financial inclusion and is an acknowledgment of the growing significance of gold-financing NBFCs in fuelling micro-economies in the country.
This would help the unbanked rural and semi-urban customers get more value against their assets and prevent them from going back to the unorganised sector.
