Instruments with this rating are considered to have very strong degree of safety regarding timely payment of debt obligations. The shares of the company were seen trading at Rs 23 higher by 1.08% on BSE at 10.15 am IST.
Manappuram and Muthoot Finance surged over 6% on BSE over the reports of forming a self-regulatory organisation (SRO).
Leading gold finance companies have decided to form a self-regulatory organisation (SRO), under Reserve Bank of India's purview, which will frame a fair business practices code for the industry, reports PTI.
The Reserve Bank of India in March tightened the norms for gold loans for non banking financial companies (NBFCs).
RBI also said, Loan-to-Value(LTV) ratio should not exceed 60% for loans granted against the collateral of gold jewellery and should be disclosed in their balance sheet.
NBFCs primarily engaged in lending against gold jewellery (such loans comprising 50 percent or more of their financial assets) shall maintain a minimum Tier l capital of 12 percent by April 01, 2014. NBFCs should not grant any advance against bullion / primary gold and gold coins, as per the RBI circular in March.
The major gold loan finance company reports that there is a slide about 5% after RBI tightening norms. The SRO will represent about 85% of gold loan, further added.