Muthoot Finance shares plunged to a 52- week low with the share trading at Rs 144.50, lower by 11.21% at 10.26 am IST, after touching an intraday low of Rs 130.30. Manappuram Finance shares also dropped by 14.24% at Rs 38.85.

NBFCs that are predominantly engaged in lending against the collateral of gold jewellery have recorded significant growth in recent years, both in terms of size of their balance sheet and physical presence.

This in turn, has led to their increased dependence on public funds including bank finance and non-convertible debentures issued to retail investors, RBI has stated in its circular.

RBI 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.

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