The rule by Reserve Bank of India to disallow non banking finance companies (NBFCs) from tagging gold loans as priority sector loans needs some more time for implementation. The NBFCs have given a written request in this regard to RBI.

Thomas George Muthoot, director, Muthoot Fincorp, said, "We have written to the RBI for extension in time by at least six months specially during the year end as both the banks and NBFCs need more time to meet their target and arrange for fresh funds."

The major gold loan NBFCs in the country are Mannapuram Finance, Muthoot Fincorp and Muthoot Finance.

Thomas Muthoot, ED of Muthoot Pappachan Group said, "We will launch innovative products and then, we will look at National Housing Bank for refinance, banks, private equity and multilateral agencies for funding."

"The objective is to tap the opportunity in the middle and low income segment which is yet to be explored fully. We will target customers in the informal segment who have a monthly income of Rs 10,000 to Rs 30,000," said Maneesh Srivastava, CEO Muthoot Housing Finance.

Pawan Aggarwal, director ratings at rating and research firm Crisil, said, "Housing finance is not something that gold loan NBFCs in particular will undertake. As part of the diversification exercise, many NBFCs will get into home finance."