New Delhi9 minutes ago
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The Reserve Bank of India (RBI) has lifted the restrictions imposed on the gold loan business of IIFL Finance Limited. The central bank had banned the company’s business on March 4 this year after several irregularities were found in its gold loan portfolio. According to the restrictions, IIFL was prohibited from approving, distributing and selling gold loans.
While imposing the ban, RBI had said- For the last few months, the Central Bank was discussing these shortcomings with the senior management and auditors of the company, but no meaningful action has been taken so far in the direction of improvement. In such a situation, this ban was necessary keeping in mind the interest of the customers.
RBI’s investigation had found 4 major deficiencies in the company’s gold loan portfolio…
- There were irregularities in checking the purity and weight of gold at the time of sanctioning of loan and auction on default.
- The loan-to-value ratio was also being violated. That is, loans were being disbursed in excess of the limit.
- The company was also violating the limit of disbursement and collection of loans in cash.
- RBI found lack of transparency in the charges levied on customer accounts etc.
The company has more than 2600 branches in more than 500 cities IIFL Finance Limited is a financial services company. Along with its subsidiaries – IIFL Home Finance Limited, IIFL Samasta Finance Limited and IIFL Open Fintech Private Limited, it offers various types of loans.
These include loans like home loans, gold loans, business loans, loan against property and micro finance. The company has more than 2600 branches in more than 500 cities through which it provides its services.
Nearly 3 months after the RBI restrictions, Dainik Bhaskar spoke to Monu Ratra, Executive Director and CEO of IIFL Finance. Read his entire interview…
Analysts believe that after the RBI’s ban on gold loans, IIFL Finance will have to focus on other business verticals in the coming times. On March 4, the Reserve Bank ordered IIFL Finance to stop selling gold loans. RBI had found several irregularities in IIFL’s gold loan portfolio.
However, while announcing the March quarter (Q4) results for FY24, founder Nirmal Jain had said, the special audit has been completed, and now we are waiting for the RBI review. Apart from gold, the company has home loans, microfinance, digital loans, loan against property, and construction and real estate loans…
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