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Gold loan stocks rallied between 2-7% after RBI hiked the Loan-to-Value (LTV) ratio limit for gold loans below Rs 2.5 lakh, which will be revised to 85% from 75% as part of the latest norms.Shares of Muthoot Finance, Manappuram Finance, and IIFL Finance rallied upto 7%, 5%, and 5% respectively. Muthoot Finance is currently trading at Rs 2,440 up from day’s low of Rs 2,284. On the other hand, Manappuram Finance is trading at Rs 245 up from day’s low of Rs 233. And IIFL Finance is currently trading at Rs 449 up from day’s low of Rs 428.Also Read | RBI slashes rates by 50 bps: What it means for debt mutual fund investorsThe RBI Governor also clarified that small-ticket gold loans will not require credit appraisal, and end-use monitoring will be limited to loans under the Priority Sector Lending (PSL) category. These simplified norms aim to reduce paperwork, expedite processing, and ease compliance for lenders."There was nothing new in the draft norms on gold loans. We have consolidated all other norms. We have seen that some regulated entities were not following the norms because there was no clarity hence we have consolidated it. We will today or Monday morning release the final guidelines,” the Governor said.Earlier, last week, the Ministry of Finance had recommended revisions to RBI's draft directions on lending against gold collateral, including postponing the implementation. The Department of Financial Services (DFS) proposed that gold loans under Rs 2 lakh should be exempted from the proposed regulatory requirements. DFS stated that this step was required to ensure timely and speedy disbursement of loans for such small-ticket borrowers.Reserve Bank of India has slashed down the repo rate by another 50 basis points to 5.50% and announced a 100 basis point CRR cut. Also Read | Nilesh Shah praises RBI’s bold rate cut, says even Trump may urge Fed to followThis is the third consecutive rate cut by RBI in the current calendar year and the second one in the current financial year. This marks the third consecutive cut under Governor Malhotra. In February and April, the apex bank had reduced the repo rate by 25 basis points each. Before this, the repo rate was held at 6.5% for 11 consecutive meetings.“Core inflation remained largely steady and contained during March-April, despite increase in gold prices exerting upward pressure,” Governor said in his policy statement.

Shares of Bajaj Finance jumped 5.5% to hit an intraday high of Rs 9,425.5 on the BSE in Friday’s trade, as the Reserve Bank of India's 50 basis point repo rate cut and 100 basis point CRR cut sparked broad optimism in the lending sector, especially among non-banking financial companies (NBFCs).While the aggressive repo rate cut is expected to weigh on net interest margins (NIMs) for banks in the near term, the RBI’s simultaneous move to reduce the Cash Reserve Ratio (CRR) by 100 bps, unlocking Rs 2.5 lakh crore of liquidity, has emerged as a game-changer for the credit ecosystem.For NBFCs like Bajaj Finance, which rely on borrowing from banks and capital markets to fund lending, this dual move of easing both rates and liquidity is expected to lower funding costs and support loan growth.Analysts noted that NBFCs stand to benefit disproportionately from the rate cut as falling interest rates reduce borrowing costs, enabling lenders to offer more competitive loan products and expand their credit books.Also read: RBI’s bazooka sends Sensex, Nifty soaring. What does it mean for stock market investors“This move is likely to enhance liquidity in the system, making borrowing cheaper and encouraging companies to pursue capital expenditure,” said Divam Sharma, Founder of Green Portfolio PMS. “With FPI inflows slowing down, this infusion of liquidity is a timely and welcome move.”According to Arsh Mogre, Economist at PL Capital, “By lowering both the price (repo) and quantity (CRR) of money, the RBI has flattened the transmission curve. The CRR cut in particular offsets short-term pressures on margins from falling lending rates.”For a lender like Bajaj Finance, improved liquidity and falling interest rates are likely to aid credit disbursal, support margins, and revive consumption-led demand, especially in retail and SME segments.“Tailwinds for NIMs from improving systemic liquidity and deposit rate cuts are visible,” said Naveen Kulkarni, CIO at Axis Securities PMS.However, he said, even as H1FY26 will see a more pronounced impact of the rate cut on NIMs, some respite is expected over H2FY26.“Asset quality concern appears to be steadily waning with unsecured segment stress showing gradual signs of stability, while the secured segment asset quality continues to hold up well. At present, we would prefer banks with promising growth prospects, healthy deposit franchises, stable asset quality metrics and strong and steady management teams.”Also read: RBI slashes rates by 50 bps: What it means for debt mutual fund investorsWith the RBI maintaining a neutral stance and indicating scope for further easing if inflation remains benign, NBFCs and banking companies could continue to benefit from the evolving rate cycle.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)