Mumbai, Dec. 23 -- Companies lending against gold are auctioning the collateral in higher quantities to recover stressed loans, at a time of rising regulatory scrutiny over the sector. Gold auctions that rose sequentially in the second quarter are expected to rise further in the ongoing December quarter, experts said, since directions from the Reserve Bank of India (RBI) pertaining to gold loans came only at the end of the second quarter.
Cumulative data on gold auctions is not available; however, leading gold loan financier Muthoot Finance Ltd said at an analyst call that it auctioned gold worth Rs.69 crore in the first quarter, followed by Rs.250 crore in the second quarter.
Another gold-focused non-bank lender, Manappuram Finance, said...