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2 min read | Updated on March 04, 2024, 19:14 IST
SUMMARY
RBI said that it has been engaging with IIFL Finance's senior management and the company's statutory auditors over deficiencies. No effective corrective action has been evidenced so far, it added.
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RBI finds material supervisory concerns in gold portfolio of IIFL Finance.
The Reserve Bank of India (RBI) on Monday barred IIFL Finance Ltd from sanctioning or disbursing gold loans with every immediate effect over material supervisory concerns.
However, the company can continue its existing gold loan portfolio through the usual collection and recovery processes, the regulator said.
The central bank reviewed the company’s financial position as of March 31, 2023, and made a number of observations.
"These practices, apart from being regulatory violations, also significantly and adversely impact the interest of the customers," RBI said.
The central bank said that it has been engaging with IIFL Finance's senior management and the company's statutory auditors over deficiencies. However, no effective corrective action has been evidenced so far, it added.
"These supervisory restrictions will be reviewed upon completion of a special audit to be instituted by the RBI and after rectification by the company of the special audit findings and the findings of RBI Inspection, to the satisfaction of RBI," the regulator said in a statement.
Shares of IIFL Finance Ltd closed at ₹598, down 3.94% or ₹24.55, on Monday.
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