Muthoot Finance Drops 8% as RBI Tightens Gold Loan Norms

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fell over 8% intraday on April 11, settling 5.75% lower at ₹2,017, after the Reserve Bank of India (RBI) released draft regulations impacting gold-backed lending. Key proposals include: - Capping the Loan-to-Value (LTV) ratio at 75%, - Limiting bullet repayment tenure to a maximum of 12 months, - Mandating NBFCs to set internal exposure limits on gold loan portfolios. These changes aim to enhance credit discipline and reduce rollover risk in the gold loan segment. While structurally sound, the business model may face near-term growth moderation due to these regulatory shifts. Among peers, Finance slipped 0.42%, while rose 0.45%. Notably, Manappuram remains under the F&O ban, restricting new derivative positions.