Muthoot Finance MD George Alexander Muthoot
Muthoot Finance, India’s largest gold loan non-banking finance company (NBFC), has doubled its loan growth guidance to 30-35 per cent in FY26 from 15 per cent earlier, MD George Alexander Muthoot told businessline in an interaction. The NBFC’s loans under management stood at ₹1.32 lakh crore as on September end, up 47 per cent on-year.
“The overall credit demand is very good not only in rural areas but in urban areas as well. Specifically for gold loan companies, gold loan demand is rising as other forms of financing, including microfinance, unsecured personal loans, credit card loans, fintech loans are on the backseat,” the MD said, adding that borrowers are now more comfortable in taking loan against gold as the gold prices have also seen an up-tick.
Muthoot says many banks and NBFCs, which were earlier not active in the gold loan space, have started disbursing higher volumes of gold loans and the Reserve Bank of India (RBI) noticed this trend last year and revised gold loan guidelines specifying key regulatory requirements.
“Whenever any new player comes and compromises on the processes, the regulator will solve the problem. With the revised guidelines, the regulator has clarified multiple business aspects. LTV (loan to value ratio) is just one aspect, there are many other factors including the way gold must be stored, checking the quality of gold, pricing aspect, auctioning standards, and giving the customers the correct proceeds,” Muthoot said.
He added that currently commercial banks hold ₹13 lakh crore of gold loans on their books, while NBFCs only have ₹3 lakh crore and thus there is space for everyone to grow.
“More people are willing to pledge their gold today. Even well to do people are pledging gold, this is not desperate move. Don’t think that gold loans are taken by poor, under privileged borrowers. Today, of the approximately 25,000 tonnes lying domestically, only 3,000 tonne is in the gold loan market,” he said.
Muthoot Finance recently infused ₹500 crore fresh capital in its wholly owned subsidiary Muthoot Money. Muthoot Money started as a used car and used commercial equipment financing company but shifted to gold loans after the pandemic due to recovery issues. If the regulator communicates that Muthoot Money be merged with Muthoot Finance as both companies are in the same line of business, the NBFC will follow the RBI’s instructions, the MD said.
Further, the NBFC expects to maintain its net interest spread at around 11 per cent, and expects borrowing cost to moderate by 15-25 bps in H2FY26. It has taken an enabling approval from shareholders to raise up to ₹2 lakh crore in current fiscal, including ₹35,000 crore via non-convertible debentures, and will raise funds if deemed necessary, Muthoot said.
Published on November 14, 2025