BENGALURUMUMBAI, Sept 20 Reuters Shares of India39;s IIFL Finance surged 13 on Friday, after the country39;s central bank revoked an earlier ban on the nonbank lender39;s gold loan business.

Shares rose as much as 13 to 560.60 rupees, their highest since late February, before paring some gains to trade 8.5 higher, as of 1134 am IST. It had fallen about 14 as of last close, after the Reserve Bank of India39;s ban in March.

The RBI had ordered IIFL Finance to stop disbursing gold loans with immediate effect, citing material supervisory concerns.

Following the curbs, the company started a special audit in April as directed by the RBI.

We expect IIFL to now make a strong comeback in the gold lending business to regain its market share in the segment, analysts at brokerage Motilal Oswal said in a note on Thursday.

We believe that IIFL could even take pricing actions and compete aggressively if needed to accelerate its gold loan growth.

IIFL reported a net loss of 226.6 million rupees 2.71 million for the quarter ended June 30, compared with a profit of 1.51 billion rupees a year earlier, hurt by the RBI39;s embargo.

Gold loans accounted for 21 of the company39;s total loan assets, as of June 30, down from 30 as of Marchend.

On Friday, peers Muthoot Finance dropped 3 and Manappuram Finance fell as much as about 4, before paring losses to trade flat.

Investors are assured that IIFL Finance has taken corrective measures and is working towards strengthening compliance,…