Muthoot Finance’s Stage III ratio rose to 3.87% of standalone loan assets as of Sept. 30, 2026, the company’s investor presentation showed, but the document did not identify a cause.
The ratio was 2.28% at June 30, 2026, and 2.25% at Sept. 30, 2025. Stage III loan assets increased to ₹72,679 million from ₹39,265 million in June, while Stage II loan assets reached ₹234,667 million from ₹18,764 million. The presentation does not explain either balance increase.
In its Oct. 31, 2026, results release, Managing Director Alexander George Muthoot said the company and its customers were adapting to revised Reserve Bank of India (RBI) gold-lending rules. Muthoot expected the adjustment to settle over a few quarters, but did not give a calendar date.
The Economic Times described the 3.87% figure as a gross nonperforming asset ratio, while Muthoot’s presentation labels the measure Stage III assets on loan assets. The outlet separately reported that Muthoot linked the rise in bad loans to regulatory changes and said it did not indicate wider industry stress. The presentation provides no breakdown linking the increase to the rules.
The RBI said the directions consolidate requirements that had differed among lenders and address concerns about lending practices and customer protections. It said provisions for different types of lenders had been developed at different times. The directions cover commercial banks, cooperative banks and nonbank financial companies, including housing finance companies, with compliance due no later than April 1, 2026.
For consumption loans structured as bullet repayments, where principal and interest come due together at maturity, the term is capped at 12 months. A renewal or top-up requires a formal borrower request, the applicable credit assessment, compliance with the loan-to-value limit and a loan that remains classified as standard. Renewing a bullet loan also requires payment of any accrued interest. The cap applies to this type of consumption loan; the directions do not set a universal monthly-payment schedule for all gold loans.
