RBI Bans IIFL Finance From Sanctioning Gold Loans

RBI Bans IIFL Finance From Sanctioning Gold Loans and disbursement from immediate effect. RBI has stopped the IIFL from financing the Gold Loan due to certain material supervisory concerns which were observed in its gold loan portfolio. The Reserve Bank of India (RBI) identified that IIFL Finance had surpassed allowable cash collections and lacked transparency in its fee structure.

The Reserve Bank of India has today, in the exercise of its powers under Section 45L(1)(b) of the Reserve Bank of India Act, 1934, directed IIFL Finance Ltd. to cease and desist, with immediate effect, from sanctioning or disbursing gold loans or assigning/ securitizing/ selling any of its gold loans,” the RBI said in an official statement.

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However, the IIFL is permitted to continue managing its existing gold loan portfolio through standard collection and recovery procedures, as stated by the regulator. This move highlights the RBI’s commitment to maintaining transparency and adherence to regulations within the financial sector. It also underscores the importance of regulatory oversight in ensuring fair and ethical business practices.

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