Gold finance firms gain on talk of hike in loan limit

MUMBAI (Reuters) - Shares of Indian finance companies which provide loans against gold rallied on Monday on speculation the RBI may allow them to lend 75 percent of the value of jewellery compared with 60 percent earlier, traders said.

However, a person familiar with the central bank's thinking said the loan-to-value ratio had not been increased. "It (LTV) wasn't changed," the person said.

Last month, the Reserve Bank of India had tightened rules for gold non-banking finance companies, and had kept the loan-to-value ratio at 60 percent.

Shares of Manappuram Finance Ltd and Muthoot Finance Ltd were up 5 percent and hit the day's upper trading limit.

Officials at the two companies declined to comment.

(Reporting by Indulal PM and Neha Dasgupta; Editing by Anupama Dwivedi)

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