Muthoot Finance soars 7% as FinMin seeks exemptions for gold loan norms

Shares of Muthoot Finance rose nearly 7 per cent on Friday after the government asked RBI to ensure small borrowers are not affected

Shares of Muthoot Finance rose nearly 7 per cent on Friday after the government asked the Reserve Bank of India (RBI) to delay the implementation of the gold loan norms until January 2026 to ensure small borrowers are not affected. 

 

The non-banking financial company's (NBFC's) stock rose as much as 6.9 per cent during the day to ₹2,207 per share, the biggest intraday gain since February 13, 2025. The stock pared gains to trade 6.4 per cent higher at ₹2,200 apiece, compared to a 0.20 per cent decline in Nifty50 as of 11:30 AM. 

 

Shares of the company have risen 3.2 per cent this year, compared to a 5 per cent advance in the benchmark Nifty50. Muthoot Finance has a market capitalisation of ₹88,526.80 crore, according to BSE data.   Other gold NBFC stocks were also trading with gains on Friday. Shares of Manappuram Finance and IIFL Finance were up over 2 per cent, while Fedbank Financial Services was up over 1.5 per cent.   Track LIVE Stock Market Updates Here

 

Government backs small borrowers' safety 

The Ministry of Finance said that the RBI's Draft Directions on Lending Against Gold Collateral were examined by the Department of Financial Services (DFS), and suggestions have been given to ensure that the requirements of the small gold loan borrowers are not adversely affected.

 

In a post on X (formerly Twitter), the Ministry said that DFS stated that such guidelines will need time to implement at the field level and hence may be suitable for implementation from January 1, 2026.

 

Further, DFS has also suggested that small ticket borrowers below ₹2 lakh may be excluded from the requirements of these proposed directions to ensure timely and speedy disbursement of loans, it said in a post on X. "It is expected that concerns raised by various stakeholders, as well as the feedback received from the public, will be duly considered by the RBI before finalising the directions on the same." 

What are RBI's draft rules for gold loans? 

Last month, the central bank released a draft regulatory framework for lending against the collateral of gold loans. The move came as the RBI widened its effort to refine credit practices and strengthen consumer protection.

 

The draft framework aims to introduce 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.

 

RBI Governor Sanjay Malhotra said the proposed guidelines on gold loans are not going to tighten such lending but rationalise it. To know all the key proposals in the draft guidelines, CLICK HERE

 

However, experts were of the view that these guidelines are likely to slow down loan growth for NBFCs focused on gold lending. Muthoot is one of the largest players in the gold loan market, focusing on loans against gold jewellery, and the stock nosedived when the RBI came up with the announcement.  

About Muthoot Finance

Muthoot Finance is a gold loan non-banking financial company (NBFC). The company specialises in providing secured loans against gold ornaments, offering credit solutions to individuals and businesses.  In addition to gold loans, Muthoot Finance also offers products such as money transfer services, foreign exchange, insurance, and microfinance, further expanding its footprint in the financial inclusion space.