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The Reserve Bank of India (RBI) has lifted the restrictions on IIFL Finance’s gold loan business, effective immediately.
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IIFL Finance took corrective actions to address the “material supervisory concerns” raised by the RBI, leading to the lifting of the ban.
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The lifting of the ban comes just ahead of the festive season, which sees a surge in loan demand, providing a significant relief to IIFL Finance.
The Reserve Bank of India (RBI) has lifted the ban on IIFL Finance’s gold loan business, imposed on March 4, 2024, due to “material supervisory concerns” ¹. The RBI’s decision is effective immediately, allowing IIFL Finance to resume providing gold loans. This move comes as a significant relief for IIFL Finance, a major player in the gold loan segment, ahead of the festive season.
IIFL Finance had taken corrective actions to address the issues raised by the RBI, including commencing a special audit in April 2024 ². The company’s gold loan business accounts for nearly 72% of its total business, with assets under management (AUM) standing at Rs 14,727 crore as of June 30, 2024 ¹. The lifting of the ban is expected to boost IIFL Finance’s share price, which had slipped 15% since the imposition of the ban.
The RBI’s decision to lift the ban on IIFL Finance’s gold loan business is seen as a positive move for the company and the gold loan market as a whole. With the festive season approaching, IIFL Finance is well-positioned to capitalize on the increased demand for gold loans. The company’s shares surged 12.33% to a high of ₹555.25 apiece on the BSE following the RBI’s announcement
