Microfinance News Digest

RBI planning to screw gold loan companies next? : News Digest

Gold loan growth pace worries RBI; Muthoot, Manappuram hit
The Reserve Bank of India is worried about the scorching pace at which loans-against-gold have been growing of late, an official at the banking regulator told CNBC-TV18.

Gold loans at last draw RBI’s attention
RBI’s order to prohibit Manappuram from accepting/renewing deposits comes 14 months after Moneylife discovered flaws in the business model of gold-loan companies. Read more on ML

gold investment

ICRA puts Manappuram Finance rating `under watch’
Ratings agency Icra today said it has put the rating of Manappuram Finance “under watch” following a Reserve Bank circular censuring the Kerala-based gold loan company for accepting deposits. IBNlive

Will RBI regulation prevent a gold loan bubble?
Given the scale at which the business of lending money at usurious rates against the collateral of gold is growing, RBI now seems to be worried about the possibility of a gold loan bubble building up in the system and is contemplating tighter regulation for the sector.Read more on FP

Gold loan firms are as vulnerable as Microfinance companies
For as long as anyone can remember, people in this land have borrowed against gold. It’s something no lender has ever refused. Many families, unable to pay back, ended up forfeiting what may well be their only precious possession. ET

Five dupe gold loan companies of Rs 2 crore
The Delhi Police arrested five ‘loan wolves’, who allegedly cheated various finance companies by depositing spurious gold as mortgage to avail loan of over Rs 2 crore, on Sunday. Read more on IT

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