IIFL Finance Faces Regulatory Heat (Image Source: iStockphoto, Twitter)
In a significant move aimed at enhancing transparency and accountability in the financial sector, the Reserve Bank of India (RBI) has initiated a special audit on IIFL Finance due to the gold loan disbursement practices. This decision comes in the wake of concerns raised by the regulatory body regarding the lending procedures adopted by these institutions.
The audit was commenced on April 23, 2024 and the directive for the special audit follows an embargo imposed by the RBI on March 4, 2024, suspending the disbursement of new gold loans by the concerned company until the satisfactory completion of the audit process.
As per the company’s filing on the NSE, “In compliance with the requirements under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the special audit directed by the Reserve Bank of India (RBI) has commenced as of today, April 23, 2024. This follows the RBI’s embargo dated March 4, 2024 which suspended the disbursement of new gold loans by our company until the satisfactory completion of the said audit.”
By closely scrutinising the gold loan disbursement practices, the central bank aims to identify any lapses or discrepancies and take appropriate remedial measures.
In response to the RBI’s directive, the company has affirmed its commitment to extending full cooperation to the special audit team. By collaborating closely with the auditors, the company aims to facilitate a comprehensive and thorough examination of its lending processes.
On Tuesday, the shares of IIFL Finance closed at Rs 410.35, 0.49 per cent up from the previous day’s closing. The 52 week high and low of the share is Rs 682.91 and Rs 304.13 respectively.
According to the BSE analytics, the shares have given negative returns of 6.82 per cent in the last 1 year.
