On the Wednesday trading session, the gold loan sector saw a significant drop in stock prices following the Reserve Bank of India’s (RBI) announcement of tighter regulations for Non-Banking Financial Companies (NBFCs) offering gold loans.
What Happened
The Reserve Bank of India announced it will issue comprehensive regulations on prudential norms for gold loans. The announcement came during the first Monetary Policy Committee meeting of the fiscal year 2026, where Governor Sanjay Malhotra announced a 25 basis point cut in the repo rate.
This move by the RBI is aimed at improving the financial health of the gold loan sector, but it has created some uncertainty in the short term. Major players have experienced a sharp fall in their share prices after the announcement, raising concerns about how these new rules will affect the industry’s growth and profitability.
RBI Governor Sanjay Malhotra stated:
Loans against the collateral of gold jewelry and ornaments, commonly known as gold loans, are extended by regulated entities for both consumption and income-generation purposes. To harmonise guidelines across various types of regulated entities, to the extent possible, while keeping in view their differential risk-bearing capabilities, we shall issue comprehensive regulations on prudential norms and conduct-related aspects for such loans
Motive Behind New Norms
The central bank introduced new norms to create consistent regulations across all lenders for non-fund-based facilities. It also plans to update guidelines for partial credit enhancement to help increase funding options for infrastructure projects.
Additionally, the RBI aims to allow the securitization of stressed assets through a market-based approach, going beyond just standard assets. The co-lending model, which was previously limited to priority sector loans, will now be extended to include all types of loans and regulated entities.
Here is the List of stocks affected by New Norms
Muthoot Finance Ltd
Muthoot Finance is one of the largest gold loan providers in India, offering gold-backed loans across the country. Gold loans constitute 98 percent of Muthoot Finance’s overall Assets Under Management (AUM). With a strong network of branches and a significant customer base, Muthoot Finance is a key player in the gold loan market.
With a market capitalization of 87,021.31 Crores on Wednesday, the shares of Muthoot Finance Ltd declined upto 10 percent, making a low of Rs. 2027.25 compared to its previous closing price of Rs. 2294.05.
IIFL Finance Ltd
IIFL Finance is another major player in the gold loan sector, with gold loans constituting 21 percent of its overall Assets Under Management (AUM). Apart from gold loans, the company provides a wide range of financial services, including home loans, loans against property, and microfinance.
With a market capitalization of 13,777.69 Crores on Wednesday, the shares of IIFL Finance Ltd declined upto 6.9 percent, making a low of Rs. 305.55 compared to its previous closing price of Rs. 333.60.
Manappuram Finance Ltd
Manappuram Finance Limited is a leading non-banking financial company (NBFC) in India, primarily engaged in gold loan services, with gold loans constituting 50 percent of its overall Assets Under Management (AUM). The company also provides a range of financial products, including microfinance, vehicle loans, and insurance.
With a market capitalization of 19,065.94 Crores on Wednesday, the shares of Manappuram Finance Ltd declined upto 2.9 percent, making a low of Rs. 221.75 compared to its previous closing price of Rs. 228.90.
Cholamandalam Investment and Finance Company Limited
Cholamandalam Investment and Finance Company Limited (Chola Finance) is a prominent non-banking financial company (NBFC) in India. It offers a wide range of financial services, including vehicle loans, gold loans, home loans, and business loans.
With a market capitalization of 1,20,468.99 Crores on Wednesday, the shares of Cholamandalam Investment and Finance Company Limited declined upto 4.26 percent, making a low of Rs. 1389.65 compared to its previous closing price of Rs. 1464.60.
Written by Sridhar J
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