If NBFCs are restricted, borrowers may go back to moneylenders

Despite the rally in gold prices, our LTV ratio is 62-63%, so there is still a healthy margin

- George Alexander Muthoot

Muthoot Finance, which reported a 43% jump in its standalone Q4 profit, driven by a strong growth in gold loan portfolio, is maintaining a conservative growth outlook for the current fiscal. Managing director George Alexander Muthoot speaks to Narayanan V about gold loan AUM growth, the impact of RBI's draft norms on gold-lending NBFCs and challenges in the microfinance arm. Excerpts:

Despite over 40% growth in gold loan AUM in FY25, why has the FY26 guidance been set at 15%?

We haven't lowered the guidance. It's simply our practice to give 15% growth guidance every year, but we end up achieving much higher. Last year, for instance, we guided 15% but achieved 41%. We prefer to maintain a conservative stance, but if needed, we may revise the guidance after the second quarter of this fiscal.

How do you see the impact of RBI's draft guidelines on gold lending?