IIFL Finance Shares Surge Over 13% After RBI Lifts Gold Loan Business Curbs

IIFL Finance Shares: IIFL Finance said that the RBI has lifted these restrictions, allowing the company to fully resume its gold loan operations in compliance with applicable laws and regulations

Shares of IIFL Finance soared over 13 per cent on Friday after the company announced that the Reserve Bank of India (RBI) has lifted the restrictions imposed on its gold loan business. On the BSE, IIFL Finance's stock surged 13.39 per cent to close at Rs 560.50, while on the National Stock Exchange (NSE), the shares jumped 13 per cent to settle at Rs 560.60.

The restrictions, which had been in place since March 4, 2024, prohibited IIFL Finance from sanctioning, disbursing, or assigning/securitising/selling any of its gold loans.

In a regulatory filing on Thursday, IIFL Finance revealed that the RBI, through a communication dated September 19, 2024, has officially lifted these restrictions, allowing the company to fully resume its gold loan operations in compliance with applicable laws and regulations. "RBI, through its communication dated September 19, 2024, has lifted the restrictions imposed on the gold loan business of the company. The RBI's decision is effective immediately and allows the Company to resume the sanctioning, disbursal, assignment, securitisation, and sale of gold loans in compliance with all relevant laws and regulations," said IIFL Finance

The company expressed its commitment to maintaining the highest standards of regulatory compliance, stating, "The company is committed to upholding the highest standards of compliance and will continue to ensure that the remedial actions taken are sustained."

With the lifting of restrictions, IIFL Finance can now proceed with the sanctioning, disbursement, assignment, securitisation, and sale of its gold loans, providing a significant boost to its business.

IIFL came under regulatory scrutiny in March during a broader crackdown on financial firms, when the RBI directed it to halt issuing new gold-backed loans due to "material supervisory concerns." Following the RBI's action, three domestic rating agencies—ICRA Ltd, Crisil Ltd, and Care Ratings Ltd—placed IIFL on rating watch with either negative or developing implications. International credit agency Fitch Ratings also placed its B+ rating for IIFL on negative watch.