Muthoot Finance shares dropped sharply by 6.17% to Rs 2,151.25 in early trade on April 9, following the Reserve Bank of India’s (RBI) announcement that it will issue comprehensive regulations for gold loans. The stock declined by Rs 141.40 from its previous close of Rs 2,292.65, with the market capitalization standing at Rs 836.13 billion.
Why the fall?
During the RBI’s first Monetary Policy Committee (MPC) meeting for FY26, Governor Sanjay Malhotra said the central bank will soon issue new guidelines covering both prudential norms and conduct-related aspects of gold loans.
“Loans against the collateral of gold jewellery and ornaments, commonly known as gold loans, are extended by regulated entities, both banks and NBFCs, for consumption and income generation purposes. In order to harmonize guidelines across various types of regulated entities, keeping in view their differential risk-bearing capabilities, we shall issue comprehensive regulations,” Malhotra stated.
This move is being seen as a regulatory tightening step that could affect gold-loan NBFCs like Muthoot Finance and Manappuram Finance, both of which have a significant share in this segment.
Other key RBI MPC announcements
Apart from the gold loan regulations, the RBI also announced several major policy updates:
1. Rate Cut Announced
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Repo rate reduced by 25 basis points from 6.25% to 6.00%
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SDF (Standing Deposit Facility) lowered to 5.75%
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MSF (Marginal Standing Facility) brought down to 6.25%
2. Stance Shift
The monetary policy stance was changed from ‘neutral’ to ‘accommodative’, suggesting further rate cuts are possible if economic conditions warrant.
3. GDP Forecast Cut
India’s FY26 real GDP growth forecast was trimmed to 6.5%, down from the previous 6.7%, citing global trade restrictions and tariff-related uncertainties.
4. CPI Inflation Outlook
The CPI inflation for FY26 was projected at 4%, remaining well within the central bank’s 2-6% comfort band. Governor Malhotra noted that a sharp drop in food prices has improved the inflation outlook, but warned of risks from global volatility and weather shocks.
