IIFL Finance Responds To RBI Crackdown On Gold Loan Business, Assures To Rectify Observations

IIFL Finance Ltd. has responded to the Reserve Bank of India's action on the recent crackdown on gold loan business.

The company has reaffirmed its commitment to rectify the observations made by the RBI, according to an exchange filing.

"We re-affirm our commitment to rectify observations of the RBI in gold loan portfolio to comply with RBI findings at the earliest and will continue with our endeavor to provide gold loan services in the overall interest of customers," it said.

It added that, as per the RBI communication, it can, however, continue to service its existing gold loan portfolio through the usual collection and recovery processes.

The company also said that, as of now, it can't ascertain the financial impact of this move.

"The financial impact quantifiable in monitory terms cannot be ascertained at this point of time," it added.

The RBI, on Monday, directed the investment and loan services company to cease and desist from disbursing gold loans with immediate effect.

It also barred the company from assigning/securitising/selling any of its gold loans.

The regulator took the action after it found material supervisory concerns in the company's gold loan portfolio, based on an inspection conducted with reference to its financial position as of March 31, 2023.