Action against IIFL Finance Limited under Section 45L(1)(b) of the Reserve Bank of India Act, 1934

Summary:

The Reserve Bank of India (RBI) has issued a directive to IIFL Finance Ltd. to cease and desist from sanctioning or disbursing gold loans with immediate effect. The RBI conducted an inspection of the company's financial position as of March 31, 2023, and observed several material supervisory concerns, including deviations in assaying and certifying purity and net weight of gold, breaches in Loan-to-Value ratio, and lack of transparency in charges levied to customer accounts. The RBI has imposed business restrictions on the company to protect the interest of customers, which will be reviewed upon completion of a special audit and rectification of findings.