Manappuram Finance to cut loan amount to 60% on RBI guidelines

24 Mar 2012 Evaluate

On the back of Reserve Bank of India (RBI) directions, Manappuram Finance will cut the loan amount to 60% of the gold value. At present, the average Loan-to-Value (LTV) offered by Manappuram Finance on its gold loan is at 66%.

Earlier this week, RBI had directed all non-banking finance companies (NBFCs) not to sanction loan beyond 60% of the value of gold jewellery. The central bank had also directed that NBFCs whose financial assets consist of loans against gold jewellery to the tune of 50% or more, will have to maintain 12% tier-I capital by April 1, 2014.

The capital adequacy ratio of Manappuram Finance is already at 18.37% (as on Dec 31, 2011) as against the 12% to be attained by April 2014 stipulated by RBI.

Manappuram Finance is one of the largest gold loan companies in India operating from Valapad, Kerala.

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