Shares of Muthoot Finance Ltd surged 6.72% to ₹2,448.80 on Friday after RBI Governor Sanjay Malhotra announced key changes in gold loan regulations during the Monetary Policy Committee (MPC) address.
Among the major regulatory changes:
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No credit appraisal will be required for gold loans up to ₹2.5 lakh per borrower
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End-use monitoring will only be mandated under Priority Sector Lending (PSL)
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Loan-to-value (LTV) ratio for small gold loans will be reduced to 85%, including the interest component
These relaxations are expected to ease operational burdens and improve credit accessibility for middle- and lower-income segments that heavily depend on gold-backed financing.
The announcement came alongside the RBI’s policy decision to cut the repo rate by 50 basis points to 5.5%, its third consecutive reduction. The CPI inflation outlook for FY26 was revised to 3.7%, while the GDP growth forecast was retained at 6.5%.
Muthoot Finance, a key player in India’s gold loan market, rallied from its previous close of ₹2,294.60, recording an intraday high of ₹2,448.80 with strong volume activity. With a market cap nearing ₹945 billion, the stock has become a central beneficiary of the revised norms.
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