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India's IIFL Finance says cenbank lifts curbs on its gold loan business

BY Reuters | ECONOMIC | 09/19/24 10:13 AM EDT

BENGALURU, Sept 19 (Reuters) - IIFL Finance said on Thursday that India's central bank has lifted the restrictions on the company's gold loan business, in what would be the removal of a key overhang on the lender.

The Reserve Bank of India (RBI) in March ordered the company to stop offering gold loans, citing supervisory concerns in its gold loans portfolio.

Gold loans under the company's management accounted for 30% of its total assets in fiscal-ended March 2024.

The lender said on Thursday it will now resume sanctioning and disbursing gold loans, after being barred from it for more than six months.

During this period, IIFL Finance's shares shed 14.5%.

The hit from the ban has been "significant", IIFL Finance had said in June, adding that its focus in the current year would be towards "compliance" and "risk management".

Following the clampdown, IIFL Finance delayed filing its quarterly results and approved multiple fundraises in a bid to shore up liquidity.

Fairfax India (FFXDF), a top shareholder of IIFL Finance, had agreed to provide up to $200 million to the company in liquidity. (Reporting by Hritam Mukherjee in Bengaluru; Editing by Shreya Biswas)

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