mumbai rating company icra revised the outlook for muthoot finance and manappuram finance from negative to stable after the reserve bank of india relaxed regulatory policy for gold finance companies last week rbi increased the loan to value ratio that originated from gold finance companies gfc from 60 to 75 of the intrinsic value of the gold content of the jewellery this means that a borrower can now avail more loan upto 75 of the value of gold value against 60 in the past from gfc icra is of the view that this development would improve growth prospects of gold loan companies and partly address concerns regarding their competitive position as compared to banks and the unorganized sector which do not have any ltv regulatory restriction icra has assigned the long to medium term borrowing of muthoot finance as aa and manappuran finance as a the rating company is of view that maximum incremental ltv of 75 should keep gfcs exposure to adverse movements in gold prices manageable additionally formulation of a transparent gold valuation process laid down in the regulation along with potential stabilization of regulatory framework for the sector could improve lender comfort and financial flexibility of the company it said icra expects the rated glcs to over the medium term report reasonable return on equity roe on the back of their healthy incremental net interest margins and expected improvement in operating efficiencies as portfolio growth revives