00:00 These days, Reserve Bank seems to be very strict.
00:03 In the last few days, you saw how RBI took action on PTM.
00:07 Now, RBI has issued a new order.
00:10 This order is issued regarding Gold Loan.
00:12 Let's understand in detail.
00:14 Reserve Bank of India has taken the latest action
00:16 and has carried out a strong operation on IIFL Finance.
00:19 RBI has imposed a ban on distributing gold loans on IIFL Finance.
00:23 Central Bank has carried out this operation
00:25 due to material supervisory concerns.
00:28 However, the company will continue to provide services
00:31 to its existing gold loan portfolio.
00:33 RBI has said that after a special audit,
00:35 if there are satisfactory results,
00:38 IIFL Finance can be given relief.
00:41 After PTM Payments Bank,
00:43 this is the second major RBI action in a month.
00:46 So, let's understand the meaning of this decision of RBI.
00:49 IIFL Finance has been asked to stop gold loan work
00:52 from the immediate effect.
00:54 Which means IIFL Finance cannot sanction any new gold loan.
00:59 It cannot disburse any new gold loan.
01:02 If there is a new application,
01:04 it cannot be approved.
01:06 And if it has been approved,
01:08 it cannot be given a new loan.
01:10 The old loans that are in circulation,
01:11 can be discontinued.
01:14 Now, let's understand why the decision to stop was taken.
01:18 RBI has taken this action under Reserve Bank of India Act 1934.
01:24 According to RBI,
01:25 on 31st March 2023,
01:27 during the financial health check of the company,
01:30 there were signs of irregularities in gold loan.
01:32 During the gold loan distribution and auction,
01:35 the company was not able to make a proper report
01:37 on gold purity and weight.
01:40 Also, the loan to value ratio was being violated.
01:44 According to RBI,
01:45 during the distribution and recovery of IIFL Finance,
01:49 more cash was being used than the rules.
01:52 Apart from this, there was no transparency
01:54 regarding the tax on the customers.
01:57 In all these ways,
01:58 the interest of the customers of IIFL Finance was being affected.
02:01 For the past few months,
02:02 RBI was working with the company's officials
02:05 to try to remove these shortcomings.
02:08 But due to the improvement,
02:09 the central bank had to take this tough step
02:11 when the situation did not improve.
02:13 If this had not been done,
02:15 it could have had a bad impact on the customers.
02:18 Well, if we talk about IIFL Finance,
02:20 the company is one of the leading companies
02:22 in the financial service sector.
02:24 It provides loan services to its subsidiary companies
02:26 IIFL Home Finance,
02:28 IIFL Samast Finance Limited,
02:31 and IIFL Open FinTech.
02:37 It has more than 2,600 branches in more than 500 cities.
02:42 The loan business of IIFL is of Rs. 77,444 crores.
02:47 In which 32% is of gold loan.
02:50 According to this, gold loan is included
02:52 in the top NBFC of the country.
02:55 Its gold loan portfolio is of Rs. 24,692 crores.
03:00 If we talk about the shares,
03:02 the impact of RBI's action is exactly the same
03:05 as seen on the IIFL Finance share.
03:08 As on 1st February, after the ban,
03:10 the parent company of Paytm
03:12 was seen on the stocks of 197 Communication.
03:17 The day after the RBI issued the order,
03:20 Paytm's share was broken by 20%.
03:23 Now, the IIFL share is also seen
03:25 to be in a bad shape on Tuesday.
03:27 With the share market opening,
03:29 the company's share was hit by a lower circuit.
03:31 And it slipped by 19.99%
03:34 and has come to the level of Rs. 477.75.
03:38 That's all for the video.
03:39 What is your opinion on this?
03:41 Do tell us by commenting.
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03:50 (upbeat music)
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