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ICRA assigns ‘AA-’rating to long to medium term borrowing of Muthoot Finance

16 Jan 2014 Evaluate

Credit rating agency ICRA has assigned the long to medium term borrowing of Muthoot Finance as ‘AA-’ after the Reserve Bank of India relaxed regulatory policy for gold finance companies. The rating agency has also revised the outlook for Muthoot Finance from negative to stable.

Last week, RBI increased the loan to value ratio that originated from gold finance companies (GFC) from 60% to 75% of the intrinsic value of the gold content of the jewellery. This means that a borrower can now avail more loan - upto 75% of the value of gold value against 60% in the past from GFC.

Muthoot Finance is a non-deposit taking systemically important non-banking finance company (NBFC). It is primarily in the business of lending against used household gold jewellery to individuals.

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