Gold loan   rbi recommendation
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Gold loan rbi recommendation

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Gold loan   rbi recommendation Gold loan rbi recommendation Presentation Transcript

  • Gold loan - RBI recommendation www.muthootfincorp.com
    • NBFC’s that have its core business in gold loans are the fasted growing financial services business in India.
    • In a recent recommendation, the working group appointed by the Reserve Bank of India raised the tier 1 capital reserve requirement for NBFC.
    View slide
    • Even though the move has not been welcomed by smaller Non Banking Finance Companies, the Larger Gold Loan NBFC’s are happy that they are now viewed on par with banks.
    View slide
    • Large gold loan companies like Muthoot Fincorp with a gold loan portfolio of more than 160 crores have welcomed the move.
    • The RBI working group recommends a Tier 1 capital reserve of 12 per cent applicable to the assets of NBFC’s also, which highlights the importance of gold loan companies in financing sensitive sectors.
    • Such measures help gold loan companies and banks to address systemic risks.
    • Previously, for gold loan with a ticket size below Rs 1,00,000 banks are required to apply a risk weight of 50 per cent while NBFC’s a risk weight of 100 per cent of the entire gold loan portfolio.
    • The new recommendations have lowered the risk weight hence freeing up more of the capital and placing gold loan NBFC’s on par with banks.
  • Contact Us
    • www.muthootfincorp.com