Muthoot Finance Share Price Falls by 7.32% After THIS Announcement of RBI

Today at 12.55 PM, Muthoot Finance share price was down 7.32% and was trading at ₹2,124.90. This can be attributed to a recent RBI announcement. The Central Bank plans to create a new set of guidelines that harmonises gold loan lending practices across India. This will encourage responsible lending practices by gold loan companies.

Muthoot Finance Share Price Drops Sharply

Muthoot Finance’s share price began trading today on the BSE at ₹228. The stock then reached a high of ₹228.55 and a low of ₹222 during the day. As per news reports, nearly 98% of Muthoot’s Assets Under Management (AUM) come from gold loans. Thus, any development in the sector will have affect its operations and revenue.

What to Expect From RBI’s New Rules?

The rules will apply uniformly to all banks and financial companies. This signals a potential shift in the way gold loans are disbursed across India. Gold loans are often secured by gold jewellery and ornaments. They help common people to meet their personal needs during an emergency. They also serve as capital for small-size businesses.

Currently, different gold loan companies follow different operational guidelines in lending. The new regulations could therefore lead to changes in the processes and terms associated with obtaining loans by pledging gold.

Potential Impact

The RBI’s proposed plan will increase standardisation of practices in the gold loan industry. This will ensure greater accountability of companies and reduce the risk of defaults.

Conclusion

The RBI’s plan for uniform gold loan rules caused a sharp fall in Muthoot Finance’s share price, given that 98% of its AUM is gold loans. These new regulations aim to standardise lending practices, increase accountability, and reduce default risks across the sector, potentially impacting Muthoot’s operations.

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