IIFL Finance said that shareholder Fairfax India will provide up to $200 million in liquidity support to the company, news agency Reuters reported. This come days after RBI barred IIFL Finance from disbursing gold loans.
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IIFL Finance said, “The RBI's embargo has raised liquidity concerns amongst the company’s investors and lenders. In response to these concerns, Fairfax India has agreed to invest up to $200 million of liquidity support on terms to be mutually agreed and subject to applicable laws, including regulatory approvals (if any).”
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On Monday, RBI stopped IIFL Finance Ltd from disbursing gold loans citing supervisory concerns which included serious deviations in assaying and certifying the purity of the yellow metal as per the central bank. Following this IIFL Finance shares fell 36% in last two trading sessions.
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Prem Prem Watsa, Chairman of Fairfax India said, “We have been long-term investors in the IIFL group of companies and have full trust and confidence in the company's strong management team led by Nirmal Jain and R Venkataraman. We are confident that Nirmal and Venkat will take corrective actions to meet and exceed RBI's compliance standards.”
{{/usCountry}}Prem Prem Watsa, Chairman of Fairfax India said, “We have been long-term investors in the IIFL group of companies and have full trust and confidence in the company's strong management team led by Nirmal Jain and R Venkataraman. We are confident that Nirmal and Venkat will take corrective actions to meet and exceed RBI's compliance standards.”
{{/usCountry}}Nirmal Jain, Managing Director and Founder of IIFL Finance, said, “At this crucial juncture, Fairfax India’s and Prem’s generous offer to provide liquidity support is very timely and motivating. We are committed to complying fully with RBI’s directives and growing the business under the regulator’s guidance on the strong foundation of compliance, risk management, and fair practices.”