RBI revokes restrictions on IIFL Finance gold loan business
Mumbai: Non-bank lender IIFL Finance said on Thursday that the Reserve Bank of India (RBI) lifted the earlier restrictions imposed on its gold loan operations.
The regulator had placed these curbs in March, citing supervisory concerns related to the company’s practices in sanctioning and disbursing gold loans.
"RBI, through its communication dated September 19, 2024, has lifted the restrictions imposed on the gold loan business of the company. The RBI's decision is effective immediately and allows the Company to resume the sanctioning, disbursal, assignment, securitisation, and sale of gold loans in compliance with all relevant laws and regulations," said IIFL Finance in a stock exchange filing.
On March 4, 2024, the RBI imposed restrictions on IIFL Finance after identifying irregularities in the assessment and certification of gold purity and net weight during loan approvals and auctions.
The Central bank also found violations of the loan-to-value ratio, substantial cash disbursements and collections exceeding statutory limits, non-compliance with standard auction procedures, and a lack of transparency in customer charges.
IIFL Finance offers gold loans through its 2,775 branches across 25 states and 4 Union Territories, catering to salaried individuals, self-employed professionals, and the MSME sector.
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