IIFL Finance fined ₹3.1 lakh by RBI over non-compliance in gold loan auctions

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3.10 lakh on IIFL Finance Limited

for non-compliance with provisions under the ‘Master Direction – Non-Banking Financial Company – Scale Based Regulation Directions, 2023’.

The penalty, levied through an order dated May 11, 2026, was imposed under powers granted by the Reserve Bank of India Act, 1934. The action follows a statutory inspection conducted by the central bank with reference to the company’s financial position as on March 31, 2025.

Based on supervisory findings indicating non-compliance with regulatory directions, the RBI had issued a notice to the company, asking it to show cause as to why a penalty should not be imposed. After reviewing the company’s written response and oral submissions during the personal hearing, the central bank concluded that the charge against the company was sustained.

The RBI found that IIFL Finance had failed to return surplus amounts realised from the auction of pledged gold articles to certain borrowers, where such amounts exceeded the outstanding loan.

The regulator clarified that the penalty is based on deficiencies in regulatory compliance and does not comment on the validity of any transaction or agreement entered into by the company with its customers. It also stated that the imposition of this penalty is without prejudice to any further action that may be initiated against the company.