Manappuram Finance surges over 6% as RBI lifts curbs on subsidiary Asirvad Micro Finance; all you need to know

In October 2024, the central bank directed both non-banking financial companies (NBFCs) to halt the sanction and disbursal of loans due to "material supervisory concerns" over their pricing policies, including excessive Weighted Average Lending Rates (WALR) and interest spreads over their cost of funds.

The RBI noted that both NBFCs have since adopted revamped systems and processes, ensuring fairness in loan pricing and ongoing compliance with regulatory norms.

"Now, having satisfied itself based on companies’ submissions, and in view of their adoption of revamped processes and systems and the companies’ commitment to ensuring adherence to the Regulatory Guidelines on an ongoing basis, especially for ensuring fairness in the loan pricing, the Reserve Bank has decided to lift the aforementioned restrictions placed on both Asirvad Micro Finance Limited and DMI Finance Private Limited with immediate effect," the central bank said.

Manappuram Finance Q2 FY25 Results

Manappuram Finance reported an unexpected growth in second-quarter profit, as strong performance in its mainstay gold loan segment offset higher provisions.

The gold loan financier's consolidated net profit rose 2% from last year to ₹571 crore (about $68 million) for the three months ended September 30.

Analysts were expecting a profit of ₹531 crore as per data compiled by LSEG, a decline of 4.8%.

Domestic gold prices surged to record highs during the quarter, driving loan growth for lenders including Manappuram Finance.

Rising prices of bullion benefit gold financiers as they increase the value of collateral gold and as more customers seek loans against higher-valued assets.