Shares of companies giving gold loans are shining more than gold, companies are excited with the new guidelines of RBI:

News Topical, Digital Desk : Shares of gold loan companies Muthoot Finance, Manappuram Finance and IIFL Finance rose up to 8 percent on Friday, June 6, 2025. The reason for this was the announcement of the Reserve Bank of India (RBI), in which it was said to increase the value of loans taken against gold.

Loan to value ratio increased

RBI said in the press conference that now the loan to value (LTV) ratio on gold loans up to Rs 2.5 lakh will be increased from 75 percent to 85 percent. This means that if you have gold worth Rs 1 lakh, then now you will be able to take a loan of up to Rs 85,000 on it. Earlier this limit was Rs 75,000.

Performance of companies in the stock market

By Friday afternoon, Muthoot Finance's stock rose 6.34 per cent to Rs 2,438.35 and touched an all-time high of Rs 2,470.25 during the day's trading. Manappuram Finance's stock jumped 3.99 per cent to Rs 243.75, while IIFL Finance was trading at Rs 449.30, up 4.77 per cent. At the same time, the BSE Sensex was at 82,083.9, up only 0.79 per cent.

What is the complete planning of RBI?

RBI Governor Sanjay Malhotra said that the new gold loan regulations will be released on June 6, and if there is a delay due to any reason, then these rules will definitely come out by June 9. This decision is not only beneficial for the borrowers but is also a big positive sign for the companies working in the gold loan sector.

The draft framework came in April

RBI had issued a draft regulatory framework in April 2025, proposing guidelines related to gold loans. Its objective was to set uniform rules for all types of lenders – such as banks, NBFCs, housing finance companies, cooperative banks and regional rural banks.

Highlights of the draft guidelines

All lenders will have to include the rules related to gold loans in their credit and risk policies.

Standard procedures will have to be followed to check the value and purity of gold.

It will be necessary to monitor what the loan money is being used for.

Loan renewal and top-up will be available only if the previous loan was in the standard category and falls under the LTV ratio.

Before disbursing a loan, it will be mandatory to do proper assessment and due diligence of the borrower's repayment capacity.

What do these changes mean for investors?

This decision of RBI can give a new impetus to the business of gold finance companies. With higher LTV, more customers will come forward for loans, which will increase the business of the companies. Investors immediately sensed this possibility and started buying shares heavily.