IIFL Finance will no longer be able to provide new gold loans. The Reserve Bank of India i.e. RBI has banned it with immediate effect. RBI has found many irregularities in the gold loan portfolio. However, the company will be able to continue serving existing gold loan customers.
RBI said- For the last few months, the Central Bank was discussing these shortcomings with the senior management and auditors of the company, but till now no meaningful corrective action has been taken. In such a situation, this restriction was necessary in the overall interest of the customers.
There were irregularities in checking the purity and weight of gold at the time of loan approval and default at the auction.
The loan-to-value ratio was also being violated. That is, loans were being disbursed in excess of the limit.
The company was also violating the limit on disbursal and collection of loans in cash.
RBI found lack of transparency in charges etc. charged on customers' accounts.
IIFL Finance Limited is a financial services company. It offers various types of loans along with its subsidiaries – IIFL Home Finance Limited, IIFL Samast Finance Limited and IIFL Open Fintech Private Limited.
These include home loans, gold loans, business loans, loan against property and micro Finance like loan is included. The company has more than 2600 branches in more than 500 cities through which it provides its services.
