IIFL Finance | Photo: Facebook
IIFL Finance on Thursday informed the exchanges that the Reserve Bank of India (RBI) has lifted restrictions imposed on its gold loan business. The regulator had imposed restrictions on the company from approving and disbursing gold loans in March 2024, citing supervisory concerns.
In its filing to the stock exchange, the company said the RBI’s decision to lift the restrictions is effective immediately and allows the company to resume sanctioning, disbursement, allotment, securitisation and sale of gold loans in compliance with all relevant laws and regulations.
On March 4, 2024, the RBI imposed restrictions on IIFL Finance after observing deviations in determination and certification of purity and net weight of gold at the time of approval of loans and at the time of auction. The RBI also found violations in loan-to-value ratio, significant disbursements and collections of cash loan amounts far in excess of the legal limit, non-compliance with the standard auction process and lack of transparency in charges to customers.
In April 2024, IIFL Finance informed the exchanges about the initiation of a special audit by the RBI.
IIFL Finance is one of the two major NBFCs in the gold loan business. As per the investor presentation, as of June 30, 2024, gold loan assets under management accounted for nearly 72 per cent of the company’s business at Rs 14,727 crore. It had fallen 33 per cent year-on-year and 37 per cent sequentially since March 30, 2024.
Gold loans are offered through its 2,775 branches across 25 states and 4 union territories to salaried, self-employed and MSME customer segments.
First published: September 19, 2024 | 19:06 IS
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