By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Gulf PressGulf Press
  • Home
  • Gulf News
    • Saudi Arabia
    • UAE24/7
    • Kuwait
    • Qatar
    • Bahrain
    • Oman
  • World
  • Business
    • Market DataLive
    • Finance
    • Economy
    • Energy
    • Crypto
    • ForexHot
    • Tech
  • Sports
  • Lifestyle
  • Videos
Search
Countries
  • Saudi Arabia
  • UAE
  • Kuwait
  • Qatar
  • Bahrain
  • Oman
More Topics
  • Technology
  • Health
  • Entertainment
  • Crypto
  • Forex
  • Stocks
Site Links
  • Business Hub
  • Trending
  • Weather
  • Customize Interests
  • Bookmarks
  • Newsletter
  • Terms
  • Press Release
  • Advertise
  • Contact
© 2023 Gulf Press. All Rights Reserved.
Reading: Fitch warns of increased volatility following RBI’s red flag on non-bank lenders
Share
Notification Show More
Latest News
L’Oréal Paris Welcomes Yasmine Sabri as New Brand Ambassador for the Middle East
Lifestyle
Roland Garros 2025: A New Era of Viewing, A Tribute to Legends, and Moments to Remember
Sports World
Bitget Celebrates Bitcoin Pizza Day by Distributing Over 5000 Pizzas in Over 20 Cities Worldwide
Crypto
Bitget Protection Fund Maintains Strength with $561 Million Average Value in April 2025
Business Crypto
Moscow Metro Marks 90 Years with Technological Advancements and Heritage Events
Lifestyle World
Aa
Gulf PressGulf Press
Aa
  • Gulf News
  • World
  • Business
  • Entertainment
  • Lifestyle
  • Sports
  • Videos
Search
  • Home
    • Videos
    • Business Hub
    • Trending
  • Gulf
    • Saudi Arabia
    • UAE
    • Kuwait
    • Qatar
    • Bahrain
    • Oman
  • Business
    • Market Data
    • Crypto
    • Economy
    • Energy
    • Finance
    • Forex
    • Tech
  • More News
    • World
    • Lifestyle
    • Entertainment
    • Sports
Have an existing account? Sign In
Follow US
  • Terms
  • Press Release
  • Advertise
  • Contact
© 2023 Gulf Press. All Rights Reserved.
Gulf Press > Business > Fitch warns of increased volatility following RBI’s red flag on non-bank lenders
Business

Fitch warns of increased volatility following RBI’s red flag on non-bank lenders

News Room
Last updated: 2024/05/16 at 1:02 PM
News Room
Share
3 Min Read
SHARE

Fitch Ratings believes that the recent efforts by the Reserve Bank of India (RBI) to enhance corporate governance and risk management in non-bank financial institutions (NBFIs) could potentially reduce industry risks in the long term. However, in the near future, this may lead to increased business volatility for affected non-bank entities. The RBI has recently issued advisories highlighting compliance gaps in the NBFI sector, including a clarification that NBFIs must adhere to regulatory caps on cash loan disbursals below Rs 20,000. This is in contrast to the higher Rs 200,000 limit for general cash transactions for individuals, which some lenders had previously adopted.

Gold loan transactions in India are commonly conducted in cash, especially for rural and semi-urban borrowers. Fitch notes that the average loan sizes for rated gold loan providers range from Rs 50,000 to Rs 80,000, with a significant portion previously being disbursed in cash. The RBI’s directive is expected to push lenders towards adopting bank-based disbursement methods. While the share of gold loan disbursements to bank accounts had been increasing prior to the advisory, the shift may impact new lending as borrowers transition to banking transactions. Fitch predicts that some cash borrowers may turn to alternative channels, such as the informal sector.

Despite the potential slowdown in lending due to the transition to bank-based disbursals, Fitch expects the credit profiles of major gold loan providers like Muthoot Finance Ltd and Manappuram Finance Limited to remain resilient to the recent regulatory developments. The rating agency suggests that as cash borrowers shift towards banking transactions, lenders may face new risks. In a separate move, the RBI had previously directed IIFL Finance Ltd to halt the sanctioning and disbursing of gold loans, citing material supervisory concerns such as deviations in gold purity certification, breaches in Loan-to-Value ratio, and excessive cash disbursals.

Overall, Fitch believes that the RBI’s focus on enhancing corporate governance and risk management in NBFIs is a positive step towards reducing industry risks in the long term. However, the immediate impact may lead to increased business volatility for affected non-bank entities. While the transition to bank-based loan disbursals may slow new lending, Fitch expects major gold loan providers to maintain resilient credit profiles amid the changing regulatory landscape. The shift towards banking transactions may pose new risks for lenders, but could also provide opportunities for growth and improved transparency in the sector.

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
I have read and agree to the terms & conditions
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
News Room May 16, 2024
Share this Article
Facebook Twitter Copy Link Print
Previous Article Contractor directed to compensate for construction supplies used 13 years ago
Next Article Chelsea players adore Pochettino and should stand up for him, claims Palmer
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Stay Connected

235.3k Followers Like
69.1k Followers Follow
56.4k Followers Follow
136k Subscribers Subscribe
- Advertisement -
Ad imageAd image

Latest News

L’Oréal Paris Welcomes Yasmine Sabri as New Brand Ambassador for the Middle East
Lifestyle May 23, 2025
Roland Garros 2025: A New Era of Viewing, A Tribute to Legends, and Moments to Remember
Sports World May 22, 2025
Bitget Celebrates Bitcoin Pizza Day by Distributing Over 5000 Pizzas in Over 20 Cities Worldwide
Crypto May 22, 2025
Bitget Protection Fund Maintains Strength with $561 Million Average Value in April 2025
Business Crypto May 20, 2025

You Might also Like

Crypto

Bitget Celebrates Bitcoin Pizza Day by Distributing Over 5000 Pizzas in Over 20 Cities Worldwide

May 22, 2025
BusinessCrypto

Bitget Protection Fund Maintains Strength with $561 Million Average Value in April 2025

May 20, 2025
BusinessGulfUAE

Muhammad Umair Saeed: The Billionaire Tech Architect Powering AI, Drones, Blockchain & Cybersecurity from Dubai to the World

May 10, 2025
BusinessCrypto

RWA project FEXSE tokenises $600,000 Jacob & Co. luxury watch on the blockchain

April 14, 2025
Business

NTT DATA Business Solutions Expands Presence in UAE with Stronger Regional Leadership

March 28, 2025

Sustainable Moving Services: How Dubai’s Moving Companies Are Going Green

February 20, 2025
Tech

CNTXT and Oracle Strengthen AI Collaboration to Drive Innovation

February 14, 2025
Business

Smpl Fund I Invests $250,000 in Qora71, Supporting AI and Tech Entrepreneurs in MENA

February 4, 2025
//

Gulf Press is your one-stop website for the latest news and updates about Arabian Gulf and the world, follow us now to get the news that matters to you.

Quick Link

  • Privacy Policy
  • Terms of ue
  • Advertise
  • Contact

How Topics

  • Gulf News
  • International
  • Business
  • Lifestyle

Sign Up for Our Newsletter

Subscribe to our newsletter to get our latest news instantly!

I have read and agree to the terms & conditions
Gulf PressGulf Press
Follow US

© 2023 Gulf Press. All Rights Reserved.

Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc..

I have read and agree to the terms & conditions
Zero spam, Unsubscribe at any time.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?