New norms for gold loan companies a concern
By Vaibhav Aggarwal
Mar 28, 2012
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The recent regulations levied by regulator Reserve Bank of India on gold loan companies has become a matter of concern for them.

The gold loan providers, mostly non banking finance companies (NBFCs) are in discussion over this issue. According to Mr George Alexander Muthoot, Managing Director of Muthoot Finance, the Association of Gold Loan NBFCs is going to have a meeting today in Kerala to discuss the issue.

Mr Muthoot said that they are not harboring the aim of asking the regulator, RBI to withdraw the circular. Rather they would be seeking clarifications over certain aspects of the circular.

Muthoot Finance happens to be the largest player in this segment.

The concerns of these companies lies with the fact that the new circular's regulations would make them fall farther behind in competition with banks.
While banks can lend upto 140% of the gold value, as per the new circular, the NBFCs can lend only upto 60% of the gold value.


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