Icra Limited · NSE:ICRA
Icra — Investor Presentation (April 2025)
19 slides from Icra's investor presentation, April 2025
Slide 1: Non-banking Financial Companies – Gold Loans
Non-banking Financial Companies – Gold Loans Draft proposals expected to bring much-needed clarity; however, near- term growth would come under pressure APRIL 2025 1
Slide 2: Highlights
Highlights ▪ To move towards a principle-based and harmonised regulatory framework, on April 9, 2025, the RBI1 issued draft Directions on Lending Against Gold Collateral (Gold loans), applicable to all REs2, viz. banks and NBFCs3. The impact of these draft Directions, if implemented, have been prese
Slide 3: Highlights
Highlights Doorstep gold loans and co-lending ▪ Innovative products such as ‘Doorstep’ gold loans and co-lending arrangements could be arrangements likely to be impacted by impacted as the gold collateral is proposed to be stored and handled only at the lender’s stringent requirements for handling b
Slide 4: Pillars of the proposed regulatory framework
Pillars of the proposed regulatory framework Credit Appraisal, Asset Customer Protection Classification and Provisioning Documentation and Risk Management and Data Disclosures Internal Controls 44 www.icra.in
Slide 5: Loan classification based on end-use
Loan classification based on end-use Distinction between income generating loans and consumption loans has been brought out under the proposed regulations Lending against gold INCOME GENERATING LOANS CONSUMPTION LOANS Loans extended to individuals for meeting Loans extended for productive economic a
Slide 6: Eligibility criteria for usage as collateral
Eligibility criteria for usage as collateral Gold Ornaments ▪ Items meant for use as adornment of any object, decorative items, or utensils, made of, or manufactured from gold, excluding gold jewellery Gold Jewellery ▪ Gold that is designed to be worn as personal adornments Specified Gold Coins ▪ Sp
Slide 7: Credit appraisal and monitoring – LTV norms
SIMPLE Credit appraisal and monitoring COMPARISON – LTV norms TABLE Existing Regulation/ Proposed Regulation Impact Practices Proposed Regulation ▪ LTV ceiling of 75% shall apply to all gold loans sanctioned by NBFCs, ▪ NBFCs would incrementally need to Maintain an LTV ratio not exceeding irrespecti
Slide 8: Gold price rally continues amid uncertainty in global economy
Gold price rally continues amid uncertainty in global economy; the proposed LTV norms would further protect lenders from price volatility Exhibit: Gold price trend1 – Monthly average (Rs. per gram) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 Rs. 7,674 Rs. 2,930 Rs. 3,119 Rs. 3,699 Rs. 4,8
Slide 9: Credit appraisal and monitoring – LTV norms
SIMPLE Credit appraisal and monitoring COMPARISON – LTV norms TABLE Existing Regulation/ Proposed Regulation Impact Practices Proposed Regulation ▪ The proposed regulation specifically distinguishes the applicable LTV norms ▪ Banks may have to incrementally for income generating loans sanctioned by
Slide 10: Credit appraisal and monitoring
Credit appraisal and monitoring Existing Regulation/ Proposed Regulation Impact Practices ▪ Loan renewals and top-up loans, may be sanctioned by lenders if the ▪ Mandatory requirement for servicing of the Loan renewals and top-ups: Can existing loans are classified as standard, and subject to within
Slide 11: Customer protection and standardisation in documentation
Customer protection and standardisation in documentation Existing Regulation/ Proposed Regulation Impact Practices Ownership verification: Lenders shall ▪ Lenders shall keep a record of verification of the ownership of the collateral ▪ Increased operational rigour, given that an keep a record of ver
Slide 12: Customer protection and standardisation in documentation
Customer protection and standardisation in documentation Existing Regulation/ Proposed Regulation Impact Practices ▪ Release of gold collateral within a maximum of seven working days upon ▪ Provides assurance on timely availability of Timeline for release of gold collateral: full repayment/settlemen
Slide 13: Risk management, internal controls and other operational aspects
SIMPLE Risk management, internal controlsCOMPARISON and other operationalTABLE aspects Existing Regulation/ Proposed Regulation Impact Practices Concentration limits: No specified ▪ Credit/risk management policy to include appropriate ceiling on single ▪ No material impact of the proposed requiremen
Slide 14: List of ICRA-assigned ratings for NBFCs in the gold loan segment
List of ICRA-assigned ratings for NBFCs in the gold loan segment Name of the NBFC Long-term rating Outlook Short-term rating Agro Indus Credits Limited [ICRA]B+ Stable [ICRA]A4 Bajaj Finance Limited [ICRA]AAA Stable [ICRA]A1+ Fedbank Financial Services Limited - - [ICRA]A1+ IIFL Finance Limited [ICR
Slide 15: Click to Provide Feedback
Click to Provide Feedback 15 15 www.icra.in
Slide 16: Analytical Contact Details
Analytical Contact Details Name Designation Email Contact Number Karthik Srinivasan Senior Vice-President and Group Head [email protected] +91-22-61143444 A M Karthik Senior Vice-President and Co-Group Head [email protected] +91-44-4596308 R Srinivasan Vice President and Sector Head r.sri
Slide 17: Business Development/Media Contact Details
Business Development/Media Contact Details Name Designation Email Contact Number L Shivakumar Chief Business Officer [email protected] 022-61693304 Neha Agarwal Head – Research Sales [email protected] 022-61693338 Rohit Gupta Head Business Development – Infrastructure Sector rohitg@i
Slide 18: © Copyright, 2025 ICRA Limited. All Rights Reserved.
© Copyright, 2025 ICRA Limited. All Rights Reserved. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided 'as is' without
Slide 19: Thank You!
Q) cx Thank You! ey