The Reserve Bank of India (RBI) has directed IIFL Finance Ltd. to cease gold loan sanctioning or disbursing immediately. However, the company can continue servicing existing gold loan portfolios. RBI’s inspection revealed significant concerns in IIFL’s gold loan portfolio, including deviations in gold purity certification, breaches in loan-to-value ratios, and non-adherence to auction processes. Despite engagement with management and auditors, corrective actions were lacking, prompting immediate business restrictions. These will be reviewed post a special audit, with any further actions subject to RBI’s discretion. The move aims to safeguard customer interests amidst regulatory violations impacting transparency and customer welfare.
RBI Halts Gold Loan Operations for IIFL Finance Ltd.
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