Shares of key gold finance firms took a sharp hit on Wednesday following the Reserve Bank of India‘s (RBI) announcement of upcoming comprehensive guidelines for gold loans.
“Loans secured against gold jewellery and ornaments — widely known as gold loans — are currently offered by regulated entities for both personal and business needs. To ensure greater consistency and account for the varying risk appetites of these entities, we will soon introduce detailed regulations covering prudential norms and conduct standards for such loans,” said RBI Governor Sanjay Malhotra during his monetary policy address.
As a result of the announcement, stocks of major gold loan providers experienced significant declines. Muthoot Finance Ltd plummeted 11.63% to a day’s low of ₹2,027.25, while IIFL Finance Ltd dropped 8.40% to ₹305.55. Manappuram Finance Ltd also slipped by 3.12%, closing at ₹221.75.
At present, gold loans—whether availed for household consumption or to fund small businesses—are regulated under varying norms depending on the lending institution. The RBI now seeks to harmonise these rules across all regulated entities (REs), including banks and non-banking financial companies (NBFCs), to ensure a more uniform and transparent lending ecosystem.
