The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3.10 lakh on IIFL Finance Limited for non-compliance with certain provisions of the ‘Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023’. The penalty was imposed through an order dated May 11, 2026.
RBI said the penalty has been imposed under the powers granted under the Reserve Bank of India Act, 1934.
According to RBI, IIFL Finance Limited failed to return the surplus amount received from the auction of pledged gold articles to some borrowers. The surplus amount refers to the money left after adjusting the outstanding loan amount.
It means that when borrowers could not repay their gold loan, the company auctioned their pledged gold jewellery to recover the loan amount.
If the auction amount was more than the pending loan amount, the extra money belonged to the borrower. This extra money is called the surplus amount.
According to the RBI, IIFL Finance Limited did not return this extra remaining money to some customers after recovering the loan.
Simple Example
- Loan taken by customer: ₹1 lakh
- Gold auctioned for: ₹1.40 lakh
- Outstanding loan + charges: ₹1.05 lakh
The remaining ₹35,000 is the surplus amount and should be returned to the borrower. RBI says this was not done properly in some cases.
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