The non-banking finance company, Muthoot Finance, has planned to augment its business portfolio and venture into home loans and white label ATM businesses. The move comes as a means to decrease risks arising out of business exposure to a single sector.
Making the announcement, the chairman of the gold loans company, Mr. M. G. George Muthoot said, "Although these are new business areas, they fit well into our business model. Also, we need to diversify. Even the regulators want us to do so, rather than having a single sector exposure." It is to be noted that the primary business of Muthoot Finance is to offer loans against the mortgage of gold ornaments. The monetary regulator, Reserve Bank of India, had recommended the company to revamp its business model and diversify itself in order to reduce business risks.
It is reported that the Kerala based NBFC is eyeing to foray into home loans for low cost houses as it is expected to fit well into the company's current business model. The company has the advantage of greater reach and thus has huge customer base.
The company has applied to National Housing Bank, the watchdog of Housing Finance companies, to get its approval for entering the home loans business. It has applied to RBI to get permission to set up white label ATMs.