With RBI’s ban on new gold loans, IIFL Finance faces hurdles in its lending operations, raising concerns over the company’s gold loan portfolio integrity. Despite the setback, existing customers remain unaffected, while the company’s share price reflects a mixed response to the regulatory action.
In a recent development, the Reserve Bank of India (RBI) has taken a significant step by imposing an immediate ban on IIFL Finance for offering new gold loans. This decision came in light of irregularities found in the company’s gold loan portfolio, raising concerns about the protection of customer interests.
However, it’s important to note that existing gold loan customers of IIFL Finance will not be affected by this ban and will continue to receive services from the company as usual. The RBI’s intervention aims to address major deficiencies identified in IIFL’s gold loan operations.
IIFL Finance Limited, known for its extensive branch network in various cities, provides a range of financial services, including home loans, business loans, and microfinance. Despite the setback of the ban on new gold loans, the company has shown robust growth in its share price over the past years.
Following the RBI’s action, IIFL’s share price closed at Rs. 598, marking a 3.94% decrease. This move by the RBI draws parallels to a similar ban imposed on Paytm Payments Bank in the past.
The ban on new gold loans for IIFL Finance was primarily triggered by violations in its gold loan portfolio, particularly relating to discrepancies in loan-to-value ratios. As the company navigates through this regulatory challenge, it is allowed to continue its other business activities while undergoing a special audit to ensure adherence to regulations.
Despite the recent dip in its share price, IIFL Finance has demonstrated resilience in the market, with a 31.75% increase in share price over the past year. The company’s market capitalization stands at an impressive Rs. 22,816.50 crore, indicating investor confidence in its long-term prospects.
Moreover, recent trends show that IIFL Finance’s share price has maintained growth momentum even amidst the ban on new gold loans, with a 0.67% increase over the past month. This suggests that the company is actively adapting to regulatory challenges and investor sentiments.
