Shares in gold finance companies Manappuram Finance and Muthoot Finance fell on Tuesday after the Reserve Bank of India banned loans for buying gold in a bid to dissuade people from indulging in speculative activity.
At 10:35 a.m., Muthoot Finance traded 1.9 per cent lower while Manappuram Finance fell 3 per cent on a day when both the Sensex and the Nifty staged a recovery.
The RBI on Monday directed banks to not give loans for purchase of gold in any form, including primary gold, bullion and jewellery. However, it said banks can provide finance for genuine working capital requirements of jewellers. (Read More)
The decision was taken in view of a significant rise in gold imports in the recent years, putting pressure on the current account deficit.
India is the world’s biggest buyer of bullion. In fiscal 2012, India imported nearly 1,067 tonnes of gold worth nearly $60 billion.