George Alexander Muthoot, the managing director of Muthoot Finance, on May 9 said the Reserve Bank of India’s advisory for curbs on cash disbursal of loans will not hit the company as 80 percent of its customers have moved to non-cash channels.
“The RBI advisory is not a selective instruction but to all non-banking financial companies… Don’t think it will have a big impact on us as 80 percent of our customers today have migrated to non-cash channels,” the MD said during an interaction with CNBC-TV18.
The stock of the financial services company recovered from an intraday fall of 8 percent to trade 1.86 percent down at Rs 1626.3 on the BSE at 11:57am on May 9.
Muthoot also said the RBI advisory applies to all gold lenders and therefore it’s not a challenge. However, Muthoot said some of the customers in rural regions may move to unorganised lenders.
On May 8, it was reported that the central bank asked Manappuram Finance and Muthoot Finance 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.
It was reported that certain large gold loan-providing NBFCs had reached out to the regulator for clarification on cash disbursals, following which the advisory was sent. The RBI’s department of supervision had sent the advisory specifically to gold loan financiers such as Muthoot Finance and Manappuram Finance, according to a report by CNBC-TV18
The banking regulator sent out the advisory after certain large gold loan-providing NBFCs had sought 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, according to the report.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
