RBI to conduct special audit for regulatory breaches by IIFL Finance, JM Financial Products

Mar24,2024



New Delhi: IIFL Finance Ltd. and JM Financial Products Ltd. (JMFPL) special audit To investigate them further regulatory violation, because the Reserve Bank has started the process for the appointment of an auditor. Reserve Bank has issued two separate tenders for appointment. auditors For special audit of these two Non-Banking Financial Companies,
Securities and Exchange Board of India (SEBI) listed audit firm for forensic audit As per the tender document published by the Reserve Bank of India, one can participate in the tender process and the last date for bid submission is April 8.
As per the bid documents, the selected firms will be awarded the work on April 12, 2024.
Earlier this month, the Reserve Bank had imposed curbs on both these institutions for non-compliance with regulatory guidelines.
The central bank barred IIFL Finance from sanctioning or disbursing gold loans following some material supervisory concerns over its gold loan portfolio.
reserve Bank of India had said that the company was inspected with reference to the financial position of IIFL as on March 31, 2023.
“Certain material supervisory concerns were observed in the company's gold loan portfolio, including serious deviations in checking and certifying the purity and net weight of gold at the time of loan sanction and default at the time of auction,” the RBI said. Said in a statement.
The central bank said that apart from being regulatory violations, these practices also have a significant and adverse impact on the interests of customers.
A day later, the Reserve Bank imposed sanctions on JM Financial Products Ltd after finding that the company was involved in various manipulations, including using lent funds to a group of its own clients to bid for various IPOs. Helping again and again was also included.
The central bank prohibited systematically important non-deposit taking NBFCs from providing any kind of financing against shares and debentures, including sanctioning and distribution of loans against initial public offering (IPO) of shares and debentures. Membership included.
In a statement, the RBI said the action had become necessary due to “certain serious deficiencies observed in respect of loans sanctioned by the company for IPO financing as well as NCD (non-convertible debenture) subscription”.



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