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New gold loan rules to reshape lenders' business models: S&P Global Ratings

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S&P said that gold-loan specialists like Muthoot Finance and Manappuram Finance will likely face the steepest adjustments.
India's new gold loan regulations, effective from March 2024, are set to reshape the business models of non-banking financial companies (NBFCs) and banks, according to S&P Global Ratings. The new rules mandate that all gold loan providers must adhere to the same cash disbursement limits and auction processes, aiming to level the playing field between banks and NBFCs. This change is expected to increase compliance costs and potentially reduce the profit margins for NBFCs, which have traditionally relied on higher cash disbursements and quicker auction processes. S&P suggests that while larger NBFCs might adapt by diversifying their loan portfolios, smaller players could face challenges in maintaining profitability under the new regime.

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[ https://www.msn.com/en-us/money/companies/indias-new-gold-loan-rules-to-reshape-lenders-business-models-says-s-p/ar-AA1H14CB ]