 "Special audit starts at IIFL Fin after RBI restricted gold loan sanction")
A special audit by the Reserve Bank of India (RBI) at IIFL Finance has started from today, the company informed the exchanges.
“We wish to inform you that the special audit directed by the Reserve Bank of India (RBI) has commenced as of today, 23 April 2024,” as per the exchange filing.
On 4 March 2024, the central bank had suspended disbursement of new gold loans by IIFL Finance until the satisfactory completion of the audit owing to concerns regarding loan disbursement practices of the company.
RBI's inspection had indicated a lack of adherence to the standard auction process and a lack of transparency in charges being levied on customer accounts.
The RBI observed deviations in assaying and certifying purity and net weight of the gold at the time of sanctioning loans and at the time of auction upon default based on an inspection done with reference to the company’s financial position as of 31 March 2023.
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IIFL Finance also added, “We are committed to extending full cooperation to the special audit team to ensure a comprehensive and thorough audit. We shall continue to keep the stock exchanges and all relevant stakeholders informed about material developments, if any, related to the progress of the audit and adhering to regulatory guidelines and ensuring complete transparency.”
IIFL Finance is one of the top two non-banking financial companies (NBFCs) in the gold loan business and has a gold loan portfolio of Rs 24,692 crore, which constituted 32 per cent of its total loans of Rs 77,444 crore at the end of the third quarter of FY24.