Mumbai : Fairfax India Holdings Corporation (Fairfax India; TSX: FIH.U), a longstanding investor in IIFL Finance Limited, has announced its commitment to offer liquidity support following the recent Reserve Bank of India (RBI) embargo effective March 5, 2024, on the company’s gold loan disbursements.
The RBI’s embargo has sparked liquidity concerns among the company’s investors and lenders. In response, Fairfax India has agreed to provide up to US$200 million in liquidity support, subject to mutually agreed terms and applicable laws, including any necessary regulatory approvals.
Prem Watsa, Chairman of Fairfax India, expressed confidence in the IIFL group of companies and its management team, led by Nirmal Jain and R Venkataraman. He stated, “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.”
Nirmal Jain, Managing Director and Founder of IIFL Finance, welcomed Fairfax India’s offer, emphasizing its timeliness and motivation. He affirmed the company’s commitment to fully comply with RBI’s directives and to grow the business under the regulator’s guidance, emphasizing a foundation of compliance, risk management, and fair practices.