The Reserve Bank of India will appoint auditors to conduct a special audit to probe into regulatory breaches by non-banking finance companies IIFL Finance Ltd and JM Financial Products Ltd (JMFPL).
Audit firms empanelled by the Securities and Exchange Board of India (Sebi) for forensic audit can participate in two separate tenders floated by the RBI. The final date to submit bids is April 8 and the appointed firms will be awarded work on April 12.
The move comes after the central bank on March 4 barred IIFL Finance from issuing gold loans amid discrepancies in the company's gold loan portfolio.
"Certain material supervisory concerns were observed in the gold loan portfolio of the company, including serious deviations in assaying and certifying purity and net weight of the gold at the time of sanction of loans and at the time of auction upon default," the RBI said in a statement.
The following day, on March 4, the central bank also barred JM Financial from providing any loans against shares, debentures and initial public offering (IPO). RBI reportedly found that the company repeatedly helped a group of its own customers to bid for various IPOs by using loaned funds.
RBI said the action comes after it observed serious deficiencies with respect to loans sanctioned by the company for IPO financing as well as NCD subscriptions.
