New Delhi
The Reserve Bank of India (RBI) has initiated special audits for IIFL Finance Ltd and JM Financial Products Ltd (JMFPL) to investigate regulatory breaches. The RBI has issued tenders for the appointment of auditors for these non-banking finance companies (NBFCs). Audit firms approved by the Securities and Exchange Board of India (SEBI) for forensic audits are eligible to participate, with bids due by April 8, according to RBI documents.
Selected firms will commence work on April 12, 2024. This action follows recent regulatory actions against both entities. IIFL Finance was restricted from issuing gold loans due to supervisory concerns regarding gold loan portfolio management. The RBI cited deviations in gold assaying and loan sanctioning practices, negatively impacting customer interests.
Similarly, JM Financial Products faced restrictions for its involvement in manipulative activities, including aiding its customers in IPO bidding using borrowed funds. The central bank prohibited the NBFC from providing financing against shares and debentures.
The RBI attributed these actions to serious deficiencies in IPO financing and NCD subscriptions. The audits aim to delve deeper into these issues and ensure compliance with regulatory standards.
