Loans Above ₹2 Lakh Are Being Disbursed Fully Online: Muthoot Finance | CNBC TV18

Continues, and it started last Friday and it kind of serif continues all the way into the second-half of this week as well. Muthoot Finance and Manapuram both have recovered quite a bit. We reported on that RBI advisory, sort of circular, whatever you want to call it, communication to NBFCS gold, NBFC gold on NBFCS in particular, about limiting cash dispersals to ₹20,000. This is, of course, according to Income Tax department rules. We have Mr. George Alexander Muthur, managing Director at Muthur Finance now joining in. Mr. Muthur, good to have you with us here. Thank you very much for your time. Good morning. Prashanth here. You know, you and I have spoken about this in the past. The last interaction we had, I asked you exactly this. At that point you’d said you’re kind of making representations to the RBI of you know and trying to see if sort of something can be done about this. But of course its not happened and the RBI now making it clear and asking everyone to adhere to those those limits. So just wanted your sense, how will this impact your business, any cause, any disruption at all? Go on Sir. OK, two or three things I would like to add here. Thank you Prasad. Anyway, a long time since I talked to you. Also, this is actually not any selective instruction, It is a universal instruction applicable to all NBFCS, whether weak, listed, unlisted, any NBFC. This is applicable. So that’s the first part I want to say. Second is yes, people above maybe somebody taking 30,040 thousand, probably they may ask for cash where we are. And so probably we have to tell them that yes, it has to go through the bank channel only. And today most of our customers have migrated to this because 80% of customers even pay their interest occasionally through the bank channel. So it is not a total, we don’t see it as a challenge. And next second part is if they’re not going here where else are they going to go because all NBS, CS, this is applicable only place where they can go will be an unorganized place and that we have no of course rates of interest etcetera then will be high. So yeah, the the point is taken I think we will not have any issue there because all because it is applicable to all NBS, CS universally applicable to all NBSO when somebody goes from here next players also will say will give you only this. But anyway, the second part is any of our today have these things and it is not at all difficult for them to maybe tell their bank account or something and we can send it to them. So we don’t see it as a challenge at all. Got it. No, absolutely. Just for to understand what could you tell us if say you disbursed ₹100 a month, what what are that ₹100, How much was sort of, you know, would would would qualify for this sort of excess over ₹20,000? I mean, if you can give us some idea, some estimate, no, no, those numbers are very miniscule and we will, we will have no difficulty there. So I don’t have any numbers. There is nothing significant that is what I want to classify. But this was, I mean, I think another feedback I got from another industry player was that especially players based in Kerala since I mean they’ve got the longest experience of this product and you’re of course the leader. This was working very well without a problem. But of course I mean and and but maybe the rules were the rules are what they are and now it’s kind of being made and being applied in a way uniformly. Is that the correct way to look at this Mr. Mother? I think I think some already started with someone in some NPSC having some issues and many of the most of the issues are different and this was also one of the issues flagged in that company that must have maybe triggered this. Otherwise this is not a big issue at all. Mr. Mathur, just to understand, out of all the disbursals that you do, what is the percentage that happens in cash that is below 20,000 that is definitely cash. Some very few will happen about $20,000 over cash. That is insignificant. OK, alright, so got that. So, so how much of your total dispersions is online? If you could give us that number, anything about 2,00,000 is 100% online. Below that many of the people take it online. So there is no number there, but there is very, that’s what I want to say. OK, All right. With these restrictions coming in there, do you think that there could be a probability that some of your customer base goes to the unorganized market? Maybe some, but today in PCs are so many in the town, so Norways are also there. Rural area people may have some issues. So I think some people may go to unorganized sector, but that is again for the regulator to see whether people should go to unorganized or to organize for them to decide anyway for all organized place in BSc, big, small, large, listed everybody, this rule 20,000 is going to be applicable and I don’t think it will have a big impact on the business. So you don’t think that this move that has come about will have any kind of risk to your growth estimates that you had saved, that you had planned for FI 25? No, no, absolutely not. OK, Mr. both against. What about against banks because banks will be getting very aggressive or do you think, I mean the turn around time etc. If you go to a bank, I mean it is slightly longer as compared to specialists like you. Is that the way to look at it? No, But I think we have also been mastering the technique the last several years. We have been mastering the technique of sending money online also. So our staff etc are also very good in that we have been mastering the technique right from the demon time. Yeah, so, so the I think what did your guidance was for what 15%. So I don’t think we need to change any OK, nothing, nothing at all. Is there a, would you agree if I say that generally the import of many of these rules from the what we’ve seen from the RBI generally not just gold loans but across the board seems to be to kind of sort of just pull back credit growth a little bit. I mean maybe it’s running too hot and especially in certain segments, would you not just this particular circular, but overall we’ve seen a fair bit of stuff. Yes. Yeah, I think our Reserve Bank was definitely concerned about the one secured credit. Golden is a secure credit, actually it’s a secure credit and actually today we don’t give any loans on gold or gold bullion etc. Gold ornaments is actually a very good one. It’s only that we get bracketed with all NBL. That’s all. This is a very good one that it is a fully secured. It is against gold collateral and it is actually monetizing the the unused gold. Its all very good. But then sometimes some something happens in the market and the RBI gets jittery. I think something happened two months back and that must have been the cause for all these things. Otherwise NBFC gold where gold and NBFCS are doing very well. OK, All right, Mr. Madhu, we leave it there. Thank you very much and appreciate you joining in and speaking with us, clarifying some of the stuff here, you know.