Fitch affirms IIFL Finance's rating after RBI lifts ban on gold-loan business
IIFL Finance's ratings with a stable outlook, saying that after the lifting of the ban on new gold-backed lending imposed by the Reserve Bank of India (RBI), the firm's franchise will gradually stabilise. The RBI in September, had lifted regulatory restrictions it had imposed in March on IIFL Finance's gold-backed lending business.
Fitch Ratings has affirmed India-based IIFL Finance Ltd's long-term issuer default rating (IDR) and medium-term note programme rating at 'B+', and removed the ratings from 'Rating Watch Negative'. The outlook on the IDR is stable.
The affirmation and stable outlook reflect expectation that IIFL Finance's franchise will gradually stabilise after the lifting of the ban.
«Funding towards the gold-backed lending entity remains tentative, which could continue to restrain growth in the product. Nonetheless, funding volume for the housing finance and microfinance subsidiaries has been more resilient, which should support the credit profile of the consolidated group, even if it does not quickly regain its past scale and scope,» Fitch said.
It said profitability should gradually
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