Money & Banking

Muthoot Fin temporarily halts gold-loan disbursal due to ‘computer glitch’

G Naga Sridhar Hyderabad | Updated on July 25, 2019 Published on July 25, 2019

Gold loan major Muthoot Finance has halted gold loan processing and disbursal in several branches for about three days from Thursday.

In a sudden development, Muthoot, the country’s largest gold financing company, directed its branches outside Kerala not to disburse loans and move available cash with them to the head office without attributing any reason, sources said. Of its total 4,480 branches, Kerala is home to 623 branches.

Customers were seen returning from some branches on being told to wait for a few days. “We are also surprised, as this generally does not happen,” a staffer told BusinessLine.

When contacted, a company functionary “confirmed the development and attributed it to computer problems”. Gold loan is the flagship business of Muthoot Finance, which contributed 94 per cent to the consolidated profit of the group in the financial year ended March 31, 2019, at ₹2,103 crore.

The NBFC did not respond to a query on the likely impact of the halt in gold loan disbursal on its business. With over one lakh retail investors across its debenture and subordinated debt portfolio, Muthoot Finance serves more than two lakh customers daily.

Muthoot Finance’s script gained 0.54 per cent on the BSE on Thursday to close at ₹594.90.

It may be noted that the RBI had said earlier this week that it was seeing ‘signs of fragility’ and that it was constantly watching 50 NBFCs, including large ones.

Published on July 25, 2019
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