New Delhi [India], May 28 : Faced with Reserve Bank of India audit , IIFL Finance has extended date of announcing quarterly earnings beyond May 30.
In a regulatory filing to the stock exchanges, the financial services company said that the finalisation and the subsequent consideration and approval of the financial results for the quarter and year ended March 31, 2024, shall be extended beyond May 30, 2024.
"The extension is requested due to the engagement of our internal teams in the Special Audit of the Company being initiated by the Reserve Bank of India (RBI) following an RBI Order dated March 04, 2024," the exchange filing read.
It now anticipates releasing the results no later than June 30, 2024.
Additionally, to prevent insider trading, it said the trading window will remain closed for designated persons (including directors and their immediate relatives) until 48 hours after the public release of the financial results.
In early March this year, RBI directed IIFL Finance to stop sanctioning or disbursing gold loans or assigning, securitising, or selling any of its gold loans.
The company is however free to service its existing gold loan portfolio through usual collection and recovery processes.
Explaining the rationale behind this move, RBI said certain "material supervisory concerns" were observed in the gold loan portfolio of the company, including serious deviations in assaying and certifying purity and net weight of the gold at the time of sanction of loans and at the time of auction upon default; breaches in Loan-to-Value ratio.
Also, it found significant disbursal and collection of loan amount in cash far in excess of the statutory limit; non-adherence to the standard auction process; and lack of transparency in charges being levied to customer accounts, etc.
"These practices, apart from being regulatory violations, also significantly and adversely impact the interest of the customers," the central bank had said.
Over the last few months, the RBI had said it engaged with the senior management and the statutory auditors of the company on these deficiencies, However, no meaningful corrective action was evidenced so far, RBI had said while imposing those restrictions.
According to the central bank, these 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 RBI.
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