IIFL Finance Resumes Gold Loan Business Following RBI Approval
In a significant development, the Reserve Bank of India (RBI) has lifted the restrictions imposed on IIFL Finance's gold loan business. This decision, effective immediately, allows the company to resume providing gold loans, as per a regulatory filing.
The RBI had imposed restrictions on IIFL Finance in March 2024, prohibiting the company from sanctioning, disbursing, or assigning/securitising/selling any of its gold loans. This action came amidst a broader crackdown on financial firms and was based on "material supervisory concerns."
Over the past months, IIFL Finance has taken corrective actions to address the issues raised by the regulator. These efforts have culminated in the lifting of the ban, which comes as a major relief for the company, especially ahead of the festive season, a period that typically witnesses a surge in loan demand.
IIFL Finance is a prominent player in the gold loan segment, with gold loan AUM accounting for nearly 72% of its business as of June 30, 2024. This segment had witnessed a significant decline in the previous quarter, dropping 33% year-on-year and 37% sequentially from March 30, 2024. The resumption of gold loan operations is expected to provide a much-needed boost to the company's business during the upcoming festive season.