Muthoot Finance Share Price Jumps 7% as Govt Seeks Delay in Gold Loan Rules to Protect Small Borrowers

Muthoot Finance share price rose sharply by nearly 7% on Friday, May 30, 2025, after the Finance Ministry urged the Reserve Bank of India (RBI) to delay new gold loan norms to protect small borrowers. The share price reached an intraday high of ₹2,207, its biggest 1-day gain since February 13, 2025. As of 11:30 AM, the stock was trading 6.4% higher at ₹2,200, even as the Nifty50 index was down 0.20%.

Government Seeks Relaxation in Gold Loan Rules

The Finance Ministry, through the Department of Financial Services (DFS), reviewed the RBI's draft guidelines on lending against gold. It is recommended that the rules be implemented from January 1, 2026, to give time for adjustments, especially at the field levels.

In a post on X (formerly Twitter), the Ministry emphasised that small-ticket loans below ₹2 lakh should be exempted from the proposed rules to ensure smooth and timely disbursement of loans to small borrowers.

What Are the RBI’s Draft Gold Loan Guidelines?

In April 2025, the Reserve Bank of India (RBI) introduced draft guidelines to bring uniformity in gold loan procedures across all types of lenders, including banks, NBFCs, cooperative banks, and regional rural banks. The main goal was to streamline regulations and improve consumer protection.

While the RBI clarified that the guidelines are meant to streamline rather than tighten lending norms, industry feared that the rules might slow loan growth for NBFCs like Muthoot Finance, which are heavily dependent on gold loans.

Muthoot Finance Share Performance

Before this rally, shares of Muthoot Finance had risen only 3.2% in 2025, lagging behind the 5% gain in the Nifty50. As of now, Muthoot Finance has a market capitalisation of ₹88,526.80 crore, according to BSE data.

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About Muthoot Finance

Muthoot Finance is one of India’s leading gold loan NBFCs, offering secured loans against gold ornaments. Apart from gold loans, the company provides money transfers, foreign exchange, insurance, and microfinance services, contributing significantly to financial inclusion in the country.

Conclusion

The government’s move to protect small borrowers by seeking a delay in RBI’s new gold loan rules has boosted investor confidence in Muthoot Finance. With proposed exemptions for loans under ₹2 lakh, the NBFC is expected to continue serving its core customer base without disruption. This supportive stance from the government could help sustain growth momentum in the gold loan sector, especially for market leaders like Muthoot Finance.

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