RBI's inspection had revealed non-adherence to standard auction process and lack of transparency in charges being levied to customer accounts.
live bse livense live Volume Todays L/H More ×The special audit directed by banking regulator at IIFL Finance has initiated on April 23, the company has informed stock exchanges through a regulatory filing.
The disbursement of fresh gold loans have been suspended till 'satisfactory completion' of the audit, IIFL Finance said in the release to exchanges.
Story continues below Advertisement Remove AdOn March 4, the Reserve Bank of India (RBI) had asked IIFL Finance to stop sanctioning or disbursing gold loans upon observing certain 'material supervisory concerns' in the company's gold loan portfolio.
The company provides gold loans through 2,721 towns/cities across 25 states and four Union Territories to salaried, self-employed, and MSME customer segment.
RBI's inspection had revealed non-adherence to standard auction process and lack of transparency in charges being levied to customer accounts.
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The special audit directed by banking regulator at IIFL Finance has initiated on April 23, the company has informed stock exchanges through a regulatory filing.
The disbursement of fresh gold loans have been suspended till 'satisfactory completion' of the audit, IIFL Finance said in the release to exchanges. The measure is part of RBI’s supervisory action over concerns around certain loan disbursement practices, and the finance and investment services company said it is extending full cooperation to the special audit team.
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On March 4, the Reserve Bank of India (RBI) had asked IIFL Finance to stop sanctioning or disbursing gold loans upon observing certain 'material supervisory concerns' in the company's gold loan portfolio. Shares had taken a sharp knock the following day after the regulatory action.
RBI's inspection had revealed non-adherence to standard auction process and lack of transparency in charges being levied to customer accounts. "These practices, apart from being regulatory violations, also significantly and adversely impact the interest of the customers," the RBI said.
IIFL Finance has been looking to raise capital after RBI's curb to offer gold loans, and on April 17, the company had approved a rights issue of Rs 1,272 crore, slated to open end of this month. The company provides gold loans through 2,721 towns/cities across 25 states and four Union Territories to salaried, self-employed, and MSME customer segment.
