Shares of companies with gold loans are shining more than gold, RBI’s new guidelines are the reason

Shares of gold -giving companies Muthoot Finance, Manappuram Finance and IIFL Finance registered a rise of up to 8 per cent on Friday, June 6, 2025. The reason for this was the announcement of the Reserve Bank of India (RBI), in which it was said to increase the value of the loan taken on gold.

Loan to value rage increased

RBI told in the press conference that now the loan to value (LTV) ratio on gold loans up to 2.5 lakh will be increased from 75 percent to 85 percent. Meaning if you have 1 lakh gold, now you will be able to take a loan of up to 85,000 on it. Earlier this limit was Rs 75,000.

Companies perform in stock market

By Friday afternoon, the share of Muthoot Finance rose 6.34 per cent to Rs 2,438.35 and also touched an all -time high of Rs 2,470.25 in day business. Manappuram Finance shares jumped 3.99 per cent to Rs 243.75, while IIFL Finance was trading at 449.30 with a rise of 4.77 per cent. At the same time, BSE Sensex was only 0.79 percent to 82,083.9.

What is the complete planning of RBI?

RBI Governor Sanjay Malhotra said that the new gold loan regulations will be released on June 6, and if it is late due to some reason, these rules will definitely be revealed by June 9. This decision is not only beneficial for the borrowers but is also a major positive sign for companies working in the gold loan sector.

Draft framework came in April

The RBI released a draft regulatory framework in April 2025, proposing a gold loan guidelines. Its purpose was to set a similar rules for all types of lenders – such as banks, NBFCs, housing finance companies, cooperative banks and regional rural banks.

Main things of draft guidelines

All lenders have to include the rules related to gold loans in their credit and risk policy.

Standard process has to be implemented to check the value and purity of gold.

It will be necessary to monitor what the loan money is being used for.

Loan renewal and top-up will be available only when the previous loan is in standard category and LTV comes under ratio.

Before giving a loan, it will be mandatory to appropriately evaluate the borrower’s repayment ability and to delete dele.

What does this change matter to investors?

This decision of RBI can give a new pace to the business of gold finance companies. With more LTV, more customers will come forward for loan, which will increase the business of companies. Investors immediately sensed this possibility and started purchasing vigorous in shares.

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