Muthoot Finance’s board has recommended Alexander George as Managing Director and KR Bijimon as Chief Executive from October 1, 2026, as part of a planned leadership transition. Current MD George Alexander Muthoot, who will become Executive Vice Chairman, speaks to Narayanan V about the succession plan, business growth, gold loan yields and RBI’s revised LTV norms. Edited excerpts:
What prompted this sudden leadership transition?
It was not sudden. We have been working on this for a long time. I’m already 71 years old and have been with the company for the last 35 years. These are young people and they should get an opportunity. More than that, they should start thinking and taking responsibility. Alexander George has been associated with the company for 20 years.
He has led the company’s operations across North, East and West India and played a pivotal role in expanding the branch network, strengthening customer reach and driving business growth across these markets. Having said that, I’m not going anywhere. As Executive Vice Chairman, I will continue to guide the organisation and be available to the MD and the new CEO whenever they need me. The company’s growth priorities will continue because business has been in their blood.
What is your AUM growth guidance for FY27?
Our consolidated loan assets under management reached a record ₹1.91 lakh crore in Q1FY27, growing 43% year-on-year. Muthoot Finance’s standalone loan AUM also grew 44% to ₹1.72 lakh crore. It is our practice to give guidance of 15% at the beginning of the year. We will maintain that for now and review it after the second quarter.
Gold loan yields declined by nearly 300 basis points sequentially to 17.93% in Q1. What led to this?
The yield was 20.76% in the fourth quarter and 17.93% this quarter. The decline is due to a variety of reasons. We have reduced interest rates on some products. We have both higher-rate and lower-rate products, and this quarter, the lower-rate loans probably accounted for a larger share.
Also, last year was an extraordinary year because gold prices were rising sharply. Customers were taking top-up loans, and we were able to recover most dues without offering discounts or auctioning large quantities of pledged gold. We also collected most of the income from NPA accounts. Going forward, I think a steady-state yield of around 18% to 18.5% is what we should expect. We are now at 17.93%, which is close to 18%, and I think that is a decent yield.
How has the transition to RBI’s revised LTV norms progressed? Have you launched higher-LTV products?
Yes. April and May were all about understanding the new regime, reprocessing systems and launching products in line with the new regulations. In June and July, business has started picking up well. We have launched three-month, nine-month and 12-month gold loan products.
We also offer different loan-to-value options, including 85%, 80% and 75% schemes. I think there will be good demand for the 85% LTV product for loans below ₹2.5 lakh. Having said that, many customers still prefer the 75% option. The advantage now is that customers have more choice. Some want to pay interest monthly, while others prefer to pay annually. We have products catering to both preferences.