RBI lifts curbs on IIFL Finance

In an exchange filing, the company said, “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.”

The central bank 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 on customers.

The Reserve Bank of India (RBI) has removed the restrictions imposed on the gold loan business of IIFL Finance. It had imposed curbs on the company for sanctioning or disbursing gold loans in March this year, citing supervisory concerns.

In an exchange filing, the company said, “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 purity and net weight of gold at the time of sanctioning loans and at the time of auction. The central bank 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 on customers.