Central bank is probing the books of some gold financing cos to assess the concentration risk on a single asset. The Reserve Bank of India (RBI) is examining the books of some gold financing companies to assess the implication of concentration risk that could make the non-banking sector shaky in the event of a sharp fall in gold prices, as it happened with silver recently. The banking regulator may also probe whether these companies followed the know-your-client (KYC) norms, which the central bank is very keen on to prevent money laundering, said two people familiar with the development. “We are examining the books of select non-banking finance companies (NBFCs) involved in gold financing,” an RBI spokesperson said, confirming the development. Muthoot Finance (MFL) and Manappuram General Finance & Leasing (MGFL) are the largest gold financiers that are listed on the Bombay Stock Exchange.
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