RBI has banned this company from approving or distributing gold loans, this is the matter
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Mumbai (Uttam Hindu News): The Reserve Bank of India (RBI) on Monday directed IIFL Finance Ltd to stop sanctioning or disbursing any of its gold loans or assigning/securitizing/selling any of its gold loans with immediate effect. “However, the company may continue to service its existing gold loan portfolio through normal collection and recovery processes,” RBI said.
It said its inspection of IIFL’s financial position revealed material supervisory concerns in the company’s gold loan portfolio, including serious deficiencies in testing and certifying the purity and net weight of gold at the time of loan sanction and at the time of auction on default. Deviations are included.
The inspection also found violations in the loan-to-value ratio. Significant disbursement and collection of loan amount in cash in excess of the statutory limit; Non-adherence to the standard auction process and lack of transparency in charges levied by IIFL on customer accounts were found. RBI pointed out that these practices, apart from being a violation of regulations, also have a significant and adverse impact on the interests of customers.
Over the past few months, RBI has been in discussion with the company’s senior management and statutory auditors on these deficiencies. However, no meaningful corrective action has been taken so far. RBI said, this has made it necessary to impose commercial restrictions with immediate effect in the overall interest of customers.
This trading restriction is without prejudice to any other regulatory or supervisory action that may be initiated by the RBI against the company, the central bank statement said.
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