Expect 15% gold loan growth going ahead: Muthoot Finance

The Reserve Bank of India had doubled the amount of loan furnished by cooperative banks under the Gold Loan Bullet Repayment scheme to Rs 2 lakh. Earlier, all state and central cooperative banks were permitted to grant gold loans up to Rs 1 lakh with bullet repayment option.Speaking about the easing, Muthoot Finance CEO George A. Muthoot said bullet payment does not tend to affect asset quality of a company. He added that the apex bank has been relaxing norms for gold loan companies over the past years two years. The easing will help the company achieve 15 percent growth in gold loans going forward, he added.

In a notification issued on Thursday, the RBI said loans with a bullet repayment will have a maximum maturity of 12 months and the loan-to-value ratio should will be 75 percent of the gold pledged.

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