Muthoot Finance shares in focus as Tamil Nadu Finance Minister urges RBI to rethink gold loan restrictions

Shares of Muthoot Finance Ltd were in focus on Wednesday after Tamil Nadu Finance Minister Thangam Thennarasu publicly urged the Reserve Bank of India (RBI) to reconsider its proposed gold loan restrictions. The call for a policy rethink comes in response to RBI’s draft guidelines aimed at streamlining gold-backed lending by banks and NBFCs.

The proposed changes include a uniform reduction in the loan-to-value (LTV) ratio for gold loans to 75%, down from the earlier 80% for certain segments, along with stricter valuation and documentation procedures. These measures, Thennarasu said, would disproportionately impact poor and middle-class families who rely on gold loans for emergency liquidity.

“I urge the RBI to immediately withdraw the newly imposed restrictions on gold loans. Reducing the LTV ratio and burdening borrowers with excessive documentation gravely affects poor and middle-class families. At a time when re-pledging rules are already restrictive, nine more rigid guidelines are deeply insensitive,” the minister said on social media platform X.

தங்க நகை அடமானம் வைப்பதில் பல புதிய விதிமுறைகளைக் கொண்டு வந்து சாமானியர்களின் தலையில் இடியை இறக்கி இருக்கிறது ரிசர்வ் வங்கி.

ஏழை மற்றும் நடுத்தர குடும்பங்களே பெரும்பாலும் தங்களது அவசர தேவைகளுக்கு தங்க நகைக் கடன் போன்றவற்றைச் சார்ந்திருக்கும் சூழலில் அதன் மீது மத்திய ரிசர்வ்…

— Thangam Thenarasu (@TThenarasu) May 21, 2025

He further described the measures as “systemic injustice” against the vulnerable and called for more compassionate, people-centric financial policies.

Adding to the pressure, Tamil Maanila Congress (Moopanar) President G.K. Vasan also criticised the RBI draft, warning that it would adversely affect not only households but also small and marginal businesses and agricultural communities.

As a major player in the gold loan segment, Muthoot Finance is closely tied to such regulatory shifts. Investors are watching the developments closely, as any policy reversal or relaxation could influence demand dynamics and lending margins for the company.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}