Manappuram, Muthoot slip up to 10% as RBI to review gold loan regulations

In March, reportedly, India's central bank had plans to ask lenders to follow stricter underwriting processes for gold loans and monitor the end-use of funds

Gold financers' shares slipped up to 10 per cent in trade on Wednesday, April 9, 2025, after the Reserve Bank of India (RBI) governor Sanjay Malhotra announced to review gold loan regulations.

 

Around 11:14 AM, Muthoot Finance share price was down 10.15 per cent, Manappuram Finance shares were down 2.8 per cent, IIFL Finance shares were down 6.12 per cent, Federal Bank shares were down 1.17 per cent and CSB Bank shares were down 1.2 per cent on NSE. In comparison, the NSE Nifty was down 0.66 per cent at 22,387.95. 

 

The RBI governor, in his monetary policy statement, said that the central bank would undertake a comprehensive review of gold loan regulations. In March, reportedly, India's central bank had planned to ask lenders to follow stricter underwriting processes for gold loans and monitor the end-use of funds as it tries to cool growth in the fast-growing segment. 

 

 

According to reports, RBI wanted banks and non-banks to also bolster background checks on borrowers and ascertain the ownership of the gold that is being mortgaged.     

ALSO READ: RBI set to ask lenders to tighten gold loan processes, monitor fund usage

 

RBI Monetary Policy Committee (MPC) today unanimously decided to cut the repo rate by 25 basis points to 6 per cent, Governor Sanjay Malhotra announced on Wednesday. This marks the second rate cut this year. In February, the central bank had lowered the rate to 6.25 per cent from 6.5 per cent—its first cut in nearly five years. However, the MPC shifted to an ‘accommodative’ stance from earlier 'Neutral'. A neutral stance allows the central bank to either increase or decrease rates based on inflation and growth dynamics, whereas an accommodative stance focuses on supporting economic growth by lowering interest rates. By contrast, a withdrawal of accommodation typically aims to control inflation through rate hikes or tighter monetary policy.

 

The standing deposit facility (SDF) rate was also adjusted to 5.75 per cent from 6 per cent, and the marginal standing facility (MSF) rate to 6.25 per cent from 6.5 per cent.  ALSO READ | Realty, PSU Bank index down 2%; Auto outperforms after RBI cuts repo rate

 

India’s retail inflation remained moderate, standing at 3.61 per cent in February 2025, well below the RBI’s 4 per cent target. With inflation under control, policymakers have shifted focus towards sustaining economic growth, especially in the context of global trade uncertainties.