Gold Loan NBFCs Worried Over RBI Draft LTV Norms

GOLD LOAN NON-BANKING financial companies (NBFCs), which had earlier downplayed the impact of the RBI's draft gold lending guidelines, now fear that the proposed regulations — particularly the one on the loan-to-value (LTV) ratio limit — could hurt disbursements and drive borrowers back to unregulated lenders, as formal jewel loans become costlier.

- NARAYANAN V

"The only thing which we, as an Association of Gold Loan Companies (AGLOC), would like to bring to the attention of the regulator is that the LTV, which is being tweaked is not in the interest of the customer," George Alexander Muthoot, MD, Muthoot Finance, said at the company's Q4FY25 earnings call.

He added that the tweaked LTV norms will place NBFCs at a disadvantage in terms of pricing, forcing customers to go back to the unorganised money lenders.