MUMBAI (Reuters) -India’s central bank has released final regulations for gold lending and relaxed norms for small-ticket loans, a statement by the Reserve Bank of India showed on Friday.
In April, the Reserve Bank of India had proposed stricter rules for monitoring and disbursement of gold loans, which are often used by low-income borrowers.
The RBI had sought comments on the proposed rules by the middle of May.
Last week, the federal finance ministry sought relaxations to the proposed rules, urging the central bank to ensure that small borrowers are not “adversely impacted”.
The RBI removed the credit appraisal, or the process of evaluating a borrower’s creditworthiness, for gold loans up to 250,000 rupees ($2,915) per borrower, according to the statement.
It also increased the loan-to-value ratio for small-ticket loans worth up to 250,000 rupees to 85% from 75% currently.
Shares of Manappuram Finance closed 5.5% higher, while those of Muthoot Finance and IIFL Finance gained about 6.6% and 5%, respectively.
Separately, the RBI will review and tweak bank ownership guidelines, if needed, governor Sanjay Malhotra said earlier in the day.
The regulator is considering making it easier for foreign financial institutions to buy larger stakes in Indian lenders, Reuters reported earlier this week.
($1 = 85.7500 Indian rupees)
(Reporting by Siddhi Nayak; Editing by Mrigank Dhaniwala and Devika Syamnath)
