RBI Slaps Rs 3.10 Lakh Penalty on IFL Finance Over Gold Loan Auction Violations:

RBI Slaps Rs 3.10 Lakh Penalty on IFL Finance Over Gold Loan Auction Violations The Reserve Bank of India (RBI) under the Government of India has imposed a monetary penalty amounting to Rs 3.10 lakh on IFL Finance Limited for non-adherence to certain provisions issued by it. These provisions are linked to the ‘Master Direction – Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023’.

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The RBI has announced this action in exercise of its powers granted under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934, through an order dated May 11, 2026. Previously, the RBI had conducted a legal inspection of the disputed company in accordance with its financial position as of March 31, 2025. The probe concluded that the company had not complied with some of the RBI's instructions. Consequently, a show cause notice (SCN) was issued to the company, asking it to disclose the reason why the proposed consequent action (penalty) should not be taken against it.

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Thereafter, the company furnished a detailed reply to the notice, along with oral submissions during the personal hearing. However, the RBI did not find them relevant and noted that the charges made against the company were liable to be sustained. Hence, it confirmed the proposed penalty of Rs 3.10 lakh. The company did not return the extra money received from auctioning pledged gold items, after deducting the borrowers’ outstanding loan amounts, to some borrowers.