“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,” IIFL Finance said in a stock exchange filing.
The private sector non-banking financial company (NBFC) said that the RBI’s decision is effective immediately and allows it to resume providing gold loans, according to the regulatory filing.
The Reserve Bank had imposed the restrictions on the company’s unit on March 4, prohibiting the NBFC from “sanctioning, disbursing, or assigning/securitising/selling any of its gold loans”.
IIFL came under regulatory scrutiny amid a crackdown on financial firms. RBI had instructed it to halt new gold-backed lending due to “material supervisory concerns”. Over the past months, IIFL took corrective actions to address the issues raised by the regulator.
The lifting of the ban comes as a big relief for IIFL, a major player in the gold loan segment, just ahead of the kick start of the festive season that sees a rush for loan demand.
IIFL Finance is one of the top two non-banking finance companies (NBFCs) in the gold loan business. According to the investor presentation, as of June 30, 2024, gold loan AUM accounted for nearly 72 percent of the company’s business at Rs 14,727 crore. It had dropped 33 per cent year-on-year (YoY) and 37 percent sequentially from March 30, 2024.
