IIFL Finance Limited has received a penalty order from the Reserve Bank of India (RBI) imposing a fine of Rs 5.30 lakh for regulatory violations related to asset classification norms. The company disclosed this development through a regulatory filing dated February 13, 2026, in compliance with SEBI listing regulations.

Penalty Details and Regulatory Action

The RBI imposed the penalty under Section 58B(5)(aa) and Section 58G(1)(b) of the RBI Act, 1934. The regulatory action stems from the company's failure to properly classify certain accounts as non-performing assets during restructuring processes.

Nature of Violation

The penalty relates to supervisory findings concerning the company's financial position as on March 31, 2024. Specifically, IIFL Finance failed to classify certain accounts as non-performing assets on restructuring, which constitutes a violation of RBI's asset classification norms. These norms are critical for maintaining transparency in financial reporting and ensuring proper risk assessment.

Company's Response and Impact Assessment

IIFL Finance has stated that the penalty will not have any material impact on its financial, operational, or other business activities. The company emphasized that the loan accounts mentioned in the RBI's findings are no longer carried in its books, suggesting that the issues have been addressed.

Regulatory Compliance and Disclosure

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company provided comprehensive details as required under Schedule III of the listing regulations, ensuring full transparency with stakeholders and regulatory authorities.

This penalty underscores the importance of strict adherence to RBI's asset classification guidelines, particularly during loan restructuring processes. While the financial impact appears minimal for IIFL Finance, the regulatory action serves as a reminder of the critical need for compliance with banking regulations in the non-banking financial company sector.

IIFL Finance Limited has announced a comprehensive public issue of non-convertible debentures (NCDs) worth up to ₹2,000 crores, marking a significant fundraising initiative for the financial services company. The Finance Committee of the Board of Directors approved this strategic move on February 12, 2026, under the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations.

Issue Structure and Size

The NCD issue features a well-structured approach with multiple investment options for potential subscribers:

Timeline and Listing Details

The public issue will commence on February 17, 2026, and remain open until March 4, 2026. The company has designated both major stock exchanges for listing, with NSE serving as the designated stock exchange:

Nine Series with Diverse Investment Options

The NCDs are structured across nine distinct series, offering investors flexibility in terms of tenor and interest payment frequency. The series range from 24 months to 60 months with varying coupon rates:

Monthly Interest Payment Series

Annual Interest Payment Series

Cumulative Interest Series

Security and Charge Structure

The NCDs will be secured by a first ranking pari passu charge through hypothecation over the company's receivables, book debts, loans, advances, and current assets. The security structure ensures 100% coverage of outstanding principal amounts and interest until the maturity date. The charge will be created in favor of the Debenture Trustee as outlined in the Debenture Trust Deed.

The company has committed to creating the security prior to making the listing application with the stock exchanges. Additionally, if the company fails to execute the Debenture Trust Deed within the prescribed period, it will pay an additional 2% per annum interest to NCD holders over the agreed coupon rate.

Regulatory Compliance and Documentation

The issue operates under the shelf limit of ₹2,000 crores and includes comprehensive documentation filed with regulatory authorities. Both the Shelf Prospectus and Tranche I Prospectus dated February 12, 2026, have been filed with the Registrar of Companies Maharashtra Mumbai, SEBI, NSE, and BSE. The company has structured the issue in full compliance with SEBI NCS Regulations and LODR requirements.

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