Muthoot Finance last week reported 90 per cent growth in profit after tax at ₹2,046 crore in Q1FY26 as against ₹1,079 crore in Q1FY25, led by improvement in asset quality and stable margins
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AMIT DAVE
Belstar Microfinance, backed by Muthoot Finance, has started opening gold loan branches after the Reserve Bank of India (RBI) eased certain regulatory norms for microfinance institutions (MFI), Muthoot Finance MD George Alexander Muthoot told businessline.
“We have started opening branches in Belstar MFI for gold loans. Last quarter itself we have opened 10 new branches for gold loans. The RBI’s new regulations say 40 per cent of MFI assets can be non-MFI. As a prudent measure, being the gold loan leader, we should see Belstar also doing some gold loans,” Muthoot said.
The RBI in June 2025 reduced MFIs’ qualifying asset threshold to 60 per cent (net of intangible assets) from 75 per cent earlier, allowing them to diversify their asset base. Belstar Microfinance’s overall loan book stood at ₹7,706 crore as on June end.
Muthoot Finance last week reported 90 per cent growth in profit after tax at ₹2,046 crore in Q1FY26 as against ₹1,079 crore in Q1FY25, led by improvement in asset quality and stable margins.
Its loan book rose 42 per cent year-on-year (y-o-y) to ₹ 1.2 lakh crore, and will continue growing upwards of 15 per cent in the current fiscal, Muthoot said. “We want to improve business per branch. Today it is close to ₹25 crore per branch. The next step is to improve it to Rs 30-35 crore per branch. This will reduce our opex and give us better profit,” he said.
He added that while the RBI has cut repo rate by 100 basis points in the current calendar year, banks are yet to meaningfully transmit the change on marginal cost of funds based lending rate (MCLR) linked loans. The transmission of repo cut should happen over the next 1-2 quarters, Muthoot said, adding that the NBFC’s interest spread will remain stable at around 9.5 per cent in FY25.
Lastly, Muthoot said the NBFC is looking to raise $750 million via external commercial borrowing (ECB) at an opportune time this fiscal, in order to diversify its liability base. ENDS
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Published on August 19, 2025
