Manappuram Finance is optimistic on Reserve Bank of India’s (RBIs) directive on new gold loan norms. The average loan-to-value (LTV) offered by the company on its gold loans amounts to 66 percent. As a result of RBI's latest directive, the LTV offered by the company would come down to be on par with the guidelines. With the proposed consolidation of the company's branch network and consequent optimization of operating expenses at the branch level, the impact of the reduction in LTV on yield will be mitigated.
Further, the capital adequacy ratio of Manappuram Finance is already at 18.37 percent, as on December 31, 2011 as against the 12 percent to be attained by April 2014 stipulated by RBI.
The new RBI measures will ultimately strengthen the well-capitalized established players in the business with sound operating and risk management practices. RBI’s measure addresses the risks to the sector arising from the entry of multiple new players lacking the experience or the required understanding of the nuances of the business.
Manappuram Finance is one of the largest gold loan companies in India operating from Valapad, Kerala.
| Company Name | CMP |
|---|---|
| Bajaj Finance | 936.10 |
| Shriram Finance | 975.35 |
| Aditya Birla Capital | 354.50 |
| Chola Invest & Fin. | 1625.95 |
| Tata Capital | 315.05 |
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