Belstar Microfinance, which is supported by Muthoot Finance, has begun opening gold loan branches after the Reserve Bank of India (RBI) made some changes to the rules for microfinance institutions (MFIs). George Alexander Muthoot, the managing director of Muthoot Finance, shared this with businessline. He said that Belstar has already opened 10 gold loan branches in the first quarter and plans to open 50 more in the second quarter.Muthoot explained, “We have started opening branches under Belstar MFI for gold loans. In the last quarter, we opened 10 new branches for gold loans.
The RBI’s new rules allow up to 40 per cent of an MFI’s assets to be non-MFI. As a responsible leader in the gold loan sector, we believe Belstar should also offer gold loans.”In June 2025, the RBI lowered the minimum qualifying asset threshold for MFIs to 60 per cent (after deducting intangible assets) from 75 per cent previously, allowing them to spread their money across different types of assets. As of June, Belstar Microfinance’s total loans stood at ₹7,706 crore.Muthoot Finance reported a 90 per cent increase in profit after tax, reaching ₹2,046 crore in Q1FY26 compared to ₹1,079 crore in Q1FY25. This growth was driven by better performance in loans and stable profits.
The total loan amount increased by 42 per cent year-on-year to ₹1.2 lakh crore and is expected to grow by more than 15 per cent this fiscal year.Muthoot said, “We want to improve the business each branch produces. Right now, each branch brings in close to ₹25 crore. Our goal is to increase this to ₹30-35 crore per branch. This will cut our operating costs and bring better profits.”He also mentioned that even though the RBI cut the repo rate by 100 basis points this year, banks have not passed on these savings to customers through reduced rates on loans that are linked to the marginal cost of funds based lending rate (MCLR). He expects this rate change to take effect over the next 1-2 quarters. Muthoot added that the interest spread for NBFCs will stay around 9.5 per cent in FY25.Finally, Muthoot said that the NBFC is aiming to borrow $750 million through external commercial borrowing (ECB) in this fiscal year to spread out its sources of money. ENDS.
He expects this rate change to take effect over the next 1-2 quarters. Muthoot added that the interest spread for NBFCs will stay around 9.5 per cent in FY25.Finally, Muthoot said that the NBFC is aiming to borrow $750 million through external commercial borrowing (ECB) in this fiscal year to spread out its sources of money. ENDS.
