Reserve Bank Of India
The Reserve Bank of India (RBI) has instructed IIFL Finance to cease gold lending activities immediately but has permitted the company to manage its existing gold loan portfolio through standard collection and recovery processes.
The company’s gold loan asset under management has witnessed a 35% YoY growth to ₹24,692 crore, constituting 32% of the total assets under management for the December quarter.
Despite a 30% increase in net profit to ₹490 crore, RBI’s inspection revealed significant issues in IIFL Finance’s gold loan practices, leading to the imposition of immediate business restrictions.
These restrictions will be reviewed post a special audit and corrective actions by the company, with RBI reserving the right for further regulatory or supervisory measures.
IIFL Finance, a major non-banking financial company (NBFC), expressed its commitment to rectify the issues highlighted by RBI in the gold loan portfolio, emphasizing its dedication to serving customers’ interests.
The financial impact of RBI’s order is yet to be determined. Consequently, IIFL Finance’s shares experienced a 4% decline, closing at ₹598 on BSE, while the Sensex closed nearly flat at 73,872 points.
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