In early March, the Reserve Bank of India (RBI) ordered IIFL Finance to stop sanctioning, disbursing and selling gold loans, citing ‘material supervisory concerns’ in its gold loan portfolio.
There has been a sharp rise in gold loans in recent years. But there is a seedier side to this, as is evident from the red flag the RBI raised recently. Will the regulator s move protect customers?
The Reserve Bank of India (RBI) has imposed strict restrictions on Kotak Mahindra Bank, a third-most valued private bank in India, for failing to fix its IT systems over the past two years. The bank was asked to stop functions cited "with immediate effect" and assured customers that there would be no interruption to services. Kotak Mahindra Bank has taken measures to strengthen its IT systems and will continue to work with the RBI to resolve balance issues at the earliest.
On March 4, the Reserve Bank of India (RBI) had asked IIFL Finance to stop sanctioning or disbursing gold loans upon observing certain material supervisory concerns in the company s gold loan portfolio.
The latest directive issued from the RBI prohibits Kotak Mahindra Bank from onboarding new customers via its online and mobile channels and issuing fresh credit cards.
The measure is part of RBI’s supervisory action over concerns around certain loan disbursement practices. IIFL Finance said it is extending full cooperation to the special audit team.