Manappuram Finance Ltd on May 9 said that the advisory by Reserve Bank of India (RBI) on limiting cash disbursal of loans would not hamper the company’s business.
The clarification comes a day after RBI asked NBFCs to strictly adhere to the Income Tax Act (IT) provision on cash disbursement, and said that no NBFC should disburse loan amount in excess of Rs 20,000 in cash.
V.P. Nandakumar, Managing Director & CEO of the company, said, “Our highly popular product -- Online Gold Loan, that forms 50% of our gold loan book, follows a fully paperless process of application and disbursement. Even for the loans originating at branches, most of our customers prefer direct transfers. Moreover, our employees are trained to convince customers about the same as it promotes smooth operations."
The RBI advisory letter had led shares of Manappuram Finance and Muthoot Finance to slump up to 8 percent on May 9. Manappuram closed 7.36 percent lower at Rs 166.85 apiece on BSE.
"We believe that the RBI has issued the said advisory to promote transparency and prevent potential disputes, and we support the same. We have always followed fully-compliant processes and will continue to do so. We don’t see the concerned advisory dissuading customers from obtaining gold loans," Nandakumar added.
The advisory was sent by the banking regulator after certain large gold loan-providing NBFCs had reached out to the RBI for clarity on cash disbursals. It was sent by the RBI's Department of Supervision specifically to gold loan financiers like Muthoot Finance and Manappuram Finance, reported CNBC-TV18.
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