With this announcement related to gold loan in RBI’s monetary policy, shares of gold loan companies reached the seventh sky. The shares of Mannapuram Finance and IIFL Finance increased tremendously. RBI Governor Sanjay Malhotra told the media after introducing the monetary policy that it has been decided to increase the loan to value (LTV) for gold loan from 75 per cent to 85 per cent. This is nothing short of good news for small customers of home loan.
You will benefit from the new rule
Malhotra said that Rs 2.5 lakh Gold Loan For Ltv Will be 85 percent. Earlier it was 75 percent. This means that if a person suddenly wants to take a gold loan to meet the need for money, then he will be able to get a loan of more amount on his gold (jewelery). Can understand this with the help of an example. Suppose a customer wants to take a loan on his gold jewelery. The value of his jewelery is 1 lakh rupees. So now instead of Rs 75,000, he will get a loan of 85,000 rupees. RBI has made several changes in the rules of gold loan.
Earlier LTV limit was fixed at 75 percent
The RBI introduced the draft of the new rules of the Gold Loan some time ago. In this, the limit of loan-to-value was kept at 75 percent. The second major change is that a period of 12 months has been fixed for bullet payments. The draft also proposes to set a gold loan portfolio limit for NBFCs. Recently, RBI had said that the new rules of gold loan will be taken care of the needs of small customers of gold loan. For loans up to Rs 2.5 lakh, it has been decided to increase LTV from 75 percent to 85 percent. This will benefit people taking gold loan of less amount.
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Gold loan companies shares get wings
Foreign brokerage firm Jefferies said about the RBI draft that the proposal for LTV will affect the growth of gold loan business. Now this concern has ended after giving relief to small customers of RBI gold loan. Its impact showed on the shares of gold loan companies on 6 June. The shares of Manappuram Finance climbed 5.64 per cent to close at Rs 247.80. The shares of Muthoot Finance rose to Rs 2,454.80 with a rise of 6.98 per cent. IIFL Finance shares climbed 5.20 per cent to close at Rs 451.50.