The bull run for Manappuram Finance and Muthoot Finance has halted for a short term as RBI has tweaked the rules to keep these lending companies under control. The detailed order is as following.
It has been decided that all NBFCs shall hereafter maintain a loan-to-value (LTV) ratio not exceeding 60 per cent for loans granted against the collateral of gold jewellery," RBI said in a notification yesterday.
As a result of this order the share prices of gold loan lending companies have fallen by more than 20% in a day and it speaks of the effect of govt policies on stock prices and stock market.
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