 "IIFL Finance")
IIFL Finance | Photo: Facebook
IIFL Finance on Thursday informed the exchanges that the Reserve Bank of India (RBI) has lifted the restrictions imposed on its gold loan business. The regulator had imposed curbs on the company from sanctioning or disbursing gold loans in March 2024, citing supervisory concerns.
In its exchange filing, the company said that the RBI’s decision to lift restrictions is effective immediately and allows the company to resume sanctioning, disbursal, assignment, 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 assaying and certifying the purity and net weight of gold at the time of sanctioning loans and at the time of auction. The RBI also found breaches in the loan-to-value ratio, significant disbursements and collections of loan amounts in cash far in excess of the statutory limit, non-adherence to the standard auction process, and lack of transparency in charges to customers.
In April 2024, IIFL Finance had informed the exchanges about the commencement of a special audit by the RBI.
IIFL Finance is one of the top two NBFCs in the gold loan business. According to the investor presentation, as of June 30, 2024, gold loan assets under management (AUM) accounted for nearly 72 per cent of the company’s business at Rs 14,727 crore. It had dropped 33 per cent year-on-year and 37 per cent sequentially from March 30, 2024.
Gold loans are provided through its 2,775 branches across 25 states and 4 union territories to salaried, self-employed, and MSME customer segments.
First Published: Sep 19 2024 | 7:06 PM IST
