RBI directives push gold loan NBFCs share prices down
DSIJ Intelligence / 10 Mar 2017
The shares of Mannapuram Finance are down by 2.91% even as the share prices for Muthoot Finance are down by 4.08%.
In a significant development which also can be termed as a major blow to the gold loan NBFCs, country's apex bank late on Thursday issued a fresh directive to the NBFCs asking them not to disburse gold loan in cash for amount higher than Rs 20,000. The directive is not seen as a positive development in the gold loan companies by the market participants.
As expected the gold loan NBFCs' share prices are trading weak on Friday.
The shares of Mannapuram Finance are down by 2.91% even as the share prices for Muthoot Finance are down by 4.08% at the time of filing this report.
Current regulations allows the gold loan companies to disburse gold loans in cash upto Rs 1,00,000. Above Rs 1 lac the loans can be disbursed via cheques.
RBI in its directive to the NBFCs said that the current threshold under the Income Tax Act, 1961 is Rs 20,000.
Manappuram Finance Ltd and Muthoot Finance has assets under management (AUMs) of almost Rs 12300 crore and Rs 26900 crore respectively as on December 31, 2016.
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