Shares of IIFL Finance plunged by another 20% for the second consecutive time, dragging the share price down to ₹382.20 in Wednesday’s trading session on both the NSE and BSE.
This decline follows the Reserve Bank of India (RBI) directive instructing the company to halt all activities related to sanctioning or disbursing gold loans, as well as assigning, securitizing, or selling any of its existing gold loans.
The RBI’s decision stems from an inspection of the company’s financial position as of March 31, 2023, during which the banking regulator identified discrepancies in certain areas of the company’s operations.
As of 9:22 am, the shares were trading 20% lower at ₹382.20.
“The Reserve Bank of India, in the exercise of its powers under Section 45L(1)(b) of the Reserve Bank of India Act, 1934, 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 RBI said in a press release.
IIFL Finance said, “We reaffirm our commitment to rectify observations of the RBI in the gold loan portfolio to comply with RBI findings at the earliest and will continue with our endeavor to provide gold loan services in the overall interest of customers”.