RBI's stern warning to gold financiers likely to take a toll on NBFCs

While large players may not be impacted, lesser-vintage firms could have to mend ways

The Reserve Bank of India’s (RBI’s) stern warning about potential supervisory action against lenders violating gold loan norms is likely to impact non-banking financial companies (NBFCs) focusing on the segment, particularly those with lesser vintage.

Additionally, the regulator's diktat, directed more towards new fintechs, could lead to a slowdown in lending. This is because the market would seek to normalise growth in the segment, which is currently growing at a very fast pace, experts said.

RBI had on Monday directed banks and NBFCs offering gold loans to thoroughly review policies, processes, and practices to identify any gaps.