IIFL Finance Faces Setback with RBI's Gold Loan Ban, Reports 6% Decline in Net Profit

IIFL Finance reported a 6% decline in consolidated net profit to Rs 431 crore for the March quarter, following the RBI's ban on its gold loan business due to supervisory concerns. Despite an increase in total income, the company's non-performing assets rose, impacting overall performance.

IIFL Finance reported a 6% decline in consolidated net profit to Rs 431 crore for the March quarter, as the Reserve Bank of India (RBI) barred the financial services firm from undertaking gold loan business.

The move by the RBI on March 4 was triggered by multiple supervisory concerns, including serious deviations in assaying and certifying the purity of gold. A year ago, the company earned a net profit of Rs 458 crore in the same quarter.

Despite the regulatory setback, IIFL Finance's consolidated total income for January to March 2024 rose to Rs 2,922 crore from Rs 2,276 crore in the previous year, as stated in a regulatory filing. Interest income during the quarter increased to Rs 2,720 crore from Rs 2,058 crore in the year-ago period. However, gross and net non-performing assets also saw a rise, standing at 2.3% and 1.2% respectively, compared to 1.8% and 1.1% the previous year. The company's total CRAR was 19.7% as of March 31, 2024, above the minimum regulatory requirement of 15%.