IIFL takes corrective measures after RBI rap

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₹1,500 crore by way of rights issue. The NBFC will also raise debt through non-convertible debentures worth ₹500 crore. Last week its largest shareholder Fairfax India, with a shareholding of 15.1%, had pledged to invest $200 million as liquidity support to bolster confidence among investors and other stakeholders.

According to a person aware of the matter, $200 million is a kind of credit line from Fairfax, which partly will be infused in the form of equity through rights issue and the remaining over a period of time. The capital raising is expected to be completed before June this year, the person added. Separately, IIFL has appointed two additional independent directors to its board—Bijou Kurien, chairman of Retailers Association of India, and Nihar Niranjan Jambusaria, former president of the Institute of Chartered Accountants of India.

The non-bank lender has also seen a few heads roll including that of chief compliance officer and company secretary. Mauli Agarwal, who was earlier the chief compliance officer, will take charge as company secretary and compliance officer. Rupal Jain, the company secretary, has left to pursue higher studies.

Meanwhile, the company has elevated Abhiram Bhattacharjee, chief of staff as chief operating officer, a newly-created post. Last week, RBI barred IIFL Finance from disbursing gold loans citing concerns including serious deviations in assaying and certifying the purity of gold. One of the issues flagged by RBI was “breaches in loan-to-value ratio", raising questions on whether IIFL indeed ascertains the value of gold properly before giving loans.