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

IIFL Finance

19/09/2024 15:13

(Updates with details from the statement in paragraph 4,
background in paragraphs 2, 3, 5-8)
       BENGALURU, Sept 19 (Reuters) - IIFL Finance  IIFL.NS 
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  FIHu.TO , 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)
 ((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))