The Reserve Bank of India (RBI) has taken decisive action, announcing special audits to investigate regulatory breaches by IIFL Finance Ltd and JM Financial Products Ltd (JMFPL). Following the initiation of the audit process, auditors will thoroughly examine any potential violations by these non-banking finance companies.
RBI has issued separate tenders to appoint auditors for conducting special audits of IIFL Finance and JM Financial Products. Eligible audit firms listed by the Securities and Exchange Board of India (Sebi) for forensic audits can participate in the tender process. The deadline for bids submission is April 8, with the chosen firms set to commence work on April 12, 2024.
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The regulatory actions stem from significant supervisory concerns identified by the RBI. IIFL Finance faced restrictions on approving or distributing gold loans due to deviations in assaying and certifying purity and net weight of gold in its portfolio. Similarly, JM Financial Products engaged in manipulative activities, leading to restrictions on offering financing involving shares and debentures.
RBI’s interventions were prompted by serious deficiencies observed in loans sanctioned for IPO financing and NCD subscriptions by JM Financial Products. These actions underscore the RBI’s commitment to upholding regulatory compliance and safeguarding the integrity of the financial system.
