Muthoot Fin, Manappuram gain upto 8% ahead of RBI releasing gold loan norms

Muthoot Finance, Manappuram Finance and IIFL Finance shares jumped up to 7.7 per cent after RBI said LTV for gold loans below ₹2.5 lakh to be revised to 85 per cent from 75 per cent

Muthoot Finance, Manappuram Finance and IIFL Finance shares jumped up to 7.7 per cent in trade on Friday, June 6, 2025. The gold financers' stock gained after the Reserve Bank of India (RBI), while addressing the press, said that loan to value (LTV) for gold loans below ₹2.5 lakh to be revised to 85 per cent from 75 per cent. 

 

LTV in gold loans represents the maximum amount of loan a lender can give against the value of the gold pledged.

 

At 1:17 PM, Muthoot Finance share price was up 6.34 per cent at ₹2,438.35 per share, the stock hit an all time high at ₹2,470.25 per share in trade. Meanwhile, Manappuram Finance share price was up 3.99 per cent at ₹2,43.75 per share and IIFL Finance was up  4.77 per cent at ₹449.3 per share. In comparison, BSE Sensex was up 0.79 per cent at 82,083.9.   Follow Stock Market Latest Updates Today

 

What did RBI say on gold loans? 

In the press conference that happened after the policy decision was announced, RBI said that gold loan regulations will be out today, June 6, 2025, or by latest Monday, June 9, 2025.

 

RBI Governor Sanjay Malhotra added LTV for gold loans below ₹2.5 lakh will be revised to 85 per cent from 75 per cent as part of the latest norms.

Draft guidelines for gold loans

In April, RBI released a draft regulatory framework for lending against the collateral of gold jewellery and ornaments, commonly known as gold loans. Keeping in view their differential risk-bearing capabilities, the RBI's draft framework introduced a "harmonised set of rules" across all lenders such as banks, Non-Banking Finance Companies (NBFCs) including Housing Finance Companies (HFCs), co-operative banks, and regional rural banks (RRBs) involved in gold-backed lending.  ALSO READ | HDFC Bank, Bajaj Fin: Rate sensitive shares up on repo rate, CRR cut by RBI

Key proposals in the draft guidelines:

- Lenders must incorporate gold loan norms into their credit and risk management policies.

- These policies must stipulate single-borrower and sectoral exposure limits for gold loan portfolios.

- Lending institutions must establish clear standards for gold valuation, purity verification, and processes to monitor the end-use of loan proceeds.

- All loans must be assessed against the borrower’s repayment capacity, with mandatory credit appraisal and due diligence.

- Lenders must implement systems for periodic monitoring of loan utilisation and maintain documentary evidence.

- Loan renewals and top-ups shall be permitted only if the existing facility is classified as standard and complies with the prescribed loan-to-value (LTV) ratio.