New Delhi: Manappuram Finance today said it will reduce the loan amount to 60 percent of the gold value, at par with the Reserve Bank of India (RBI) directions.
Currently, the average Loan-to-Value (LTV) offered by Manappuram Finance on its gold loan is at 66 percent. RBI earlier this week had directed all non-banking finance companies (NBFCs) not to sanction loan beyond 60 percent of the value of gold jewellery.
“We are of the opinion that the new RBI measures will ultimately strengthen the well-capitalised established players in the business with sound operating and risk management practices,” V PNandakumar, Executive Chairman of Manappuram Finance, said in a statement.
The central bank had also directed that NBFCs whose financial assets consist of loans against gold jewellery to the tune of 50 percent or more, will have to maintain 12 percent tier-I capital by 1 April, 2014.
“The capital adequacy ratio of Manappuram Finance is already at 18.37 percent (as on 31 December, 2011) as against the 12 percent to be attained by April 2014 stipulated by RBI,” Nandakumar said.