Gold lenders drop on RBI measures

Last Updated: Thu, Mar 22, 2012 09:56 hrs
Woman touches gold necklace at jewellery store during festival in Allahabad

Shares of gold lenders NBFCs Muthoot Finance and Manappuram Finance fell over 10 percent each after the Reserve Bank of India said non-banking financial companies (NBFC) that lend against gold collateral would need to maintain a loan-to-value ratio not exceeding 60 percent.

"Lower LTVs would also put NBFCs at a disadvantage to banks/money lenders," said brokerage Religare in a report.

Kotak said in another report that the cap on loan-to-value ratio would impact growth and margins.

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