Mumbai: Shares of gold finance companies weakened on Thursday after the Reserve Bank of India reiterated an earlier advisory that requires non-banking finance companies (NBFCs) to cap the cash disbursal limit at ₹20,000. Muthoot Finance declined 3.73%, Manappuram Finance tumbled 7.3% and IIFL Finance was down 4%. Analysts, however, expect limited downside in these shares.
“The regulation is expected to slightly reduce the competitive advantage of NBFCs against banks and the likelihood of some share of gold loan customers shifting to the unorganised segment can’t be ruled out,” said Shweta Daptardar, VP- institutional equity research, Elara Securities. “The share prices have already reacted today, so the downside is expected to be limited.”
The RBI on Wednesday reiterated the provision of the I-T Act, 1961, and asked NBFCs to not disburse loan amounts more than ₹20,000 in cash. According to news reports, gold loan finance companies have been advised to adhere to the IT Act.
