IIFL Finance Completes Rectification Of Deficiencies Pointed Out By RBI
Gold loans accounted for nearly a third of the company's total loan assets at the end of 2023.
IIFL Finance Ltd. has said that rectification of all deficiencies pointed out by the Reserve Bank of India is now complete.
The company, in its investor presentation, said that the RBI special audit was concluded and cash disbursement and collections are within statutory limit of Rs 20,000. It will continue to issue certificate of gold purity & LTV parity for auction cases.
"The company now has provision to provide a certificate of purity (in terms of carats) and the weight of the gold pledged," it said adding that the purity certificate issued at the time of loan disbursement is used to determine the maximum permissible loan and to set the reserve price for the auction.
As the purity is not subject to any change after disbursement, the LTV difference would cease to exist and shall be within the statutory limit of 75%.
Standard auction process (taluka level)
The initial auction now happens in the same taluka or town using e-auction platform. When the company fails to get suitable response from bidders, the venue of auction is shifted to district level. The location of the auction is also clearly mentioned in the newspaper advertisements.
Complete auction details such as participants details, bank account details of winning bidders, auction proceeds, UTR no, etc. are maintained
Transparency in charges levied to customer accounts
All charges, including auction-related charges, is being communicated clearly through the application form and the company’s website
In March, the central bank ordered IIFL Finance to stop sanctioning, disbursing and selling gold loans, citing "material supervisory concerns" in its gold loan portfolio. This led to concerns about liquidity among its investors and lenders.
Gold loans accounted for nearly a third of the company's total loan assets at the end of 2023.
