Updates throughout with analyst comments, details from RBI order and co’s conference call
BENGALURU, March 5 (Reuters) – Shares of India’s IIFL Finance IIFL.NS fell 20% to the bottom of an exchange-mandated limit on Tuesday, a day after the country’s central bank barred it from offering gold loans, citing “material supervisory concerns” in its portfolio.
There were “serious deviations” in assessing the gold taken as collateral and breaches in the maximum permitted loan-to-value ratio, the Reserve Bank of India (RBI) said in a statement late on Monday.
It also found that the non-banking finance company made significant disbursals and used cash collections more than permitted, along with a lack of transparency in the charges levied to customers.
The RBI has been highlighting concerns related to gold loan portfolio in previous meetings and the company has been taking corrective action, IIFL Finance said in a conference call on Tuesday with analysts and investors.
It added the impact on financials will depend on how long it takes for the issue to resolve.
(Reporting by Rama Venkat in Bengaluru; Editing by Varun H K)
((ramavenkat.raman@thomsonreuters.com; https://twitter.com/ramavenkat0607; +91 8095218099;))
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