New Delhi, Mar 5 (PTI) Shares of IIFL Finance Ltd slumped 20 per cent on Tuesday after the Reserve Bank barred the firm from disbursing gold loans, with immediate effect following multiple supervisory concerns, including serious deviations in assaying and certifying the purity of the yellow metal.
The stock dived 20 per cent to Rs 478.50 — its lower circuit limit — on the BSE.
At the NSE, it tanked 19.99 per cent to hit the lower circuit limit of Rs 477.75.
The company’s market valuation eroded by Rs 4,552.85 crore to Rs 18,253.97 crore.
Financial services provider, IIFL Finance offers a range of loans and mortgages. The latest directions from the Reserve Bank of India (RBI) pertain to only the gold loan business.
In a statement on Monday, the RBI said it has directed IIFL Finance Ltd “to cease and desist, with immediate effect, from sanctioning or disbursing gold loans or assigning/ securitising/ selling any of its gold loans”.
The company can, however, continue to service its existing gold loan portfolio through the usual collection and recovery processes, it added.
The supervisory restrictions will be reviewed upon completion of a special audit to be instituted by the RBI and after rectification by the company of the special audit findings and the findings of RBI Inspection to the satisfaction of the central bank, it added.
Giving details, the central bank said an inspection of the company was carried out by it with reference to its financial position as of March 31, 2023.
Certain material supervisory concerns were observed in the gold loan portfolio of the company. PTI SUM DR
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