RBI Takes Action Against Mahindra & Mahindra Financial Bans Loan Recovery Through Outsourcing Arrangements

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RBI Takes Action Against Mahindra & Mahindra Financial Bans Loan Recovery Through Outsourcing Arrangements

RBI Acts Against Mahindra Finance:: The RBI has taken very seriously the cases of Mahindra Finance’s recovery agent crushing a disabled farmer’s daughter with a tractor in Hazaribagh, Jharkhand for non-payment of loan. RBI has issued an order to Mahindra & Mahindra Financial Services Ltd. saying that till further orders, the company will not recover the loan by outsourcing it through third parties.

RBI has said in its order that Mahindra & Mahindra Financial Services can recover loans only through its own employees. According to RBI, many irregularities have been found during several supervisory related outsourcing activities of this NBFC.

Regarding the matter, the company’s CEO and MD Anish Shah expressed his condolences with the family of the victim expressing grief over the accident by tweeting. Mahindra Group MD and CEO wrote, “We are deeply saddened and disturbed by the Hazaribagh incident, a shameful and unfortunate incident. We stand with the bereaved family in this hour of grief. All cooperation will be given by the company to the police officers probing the matter. Mahindra Group Chairman Anand Mahindra, while retweeting the tweet of Anish Shah, expressed his condolences with the family of the victim expressing grief over the accident. Along with this, there was also talk of review of third party collection in the matter.

Actually the finance personnel had come to get the tractor. 10,000 was to pay interest on the tractor loan. There was an altercation between the father of the pregnant woman and the finance personnel to collect the same rate of interest. Finance personnel allegedly trampled farmer’s elder daughter Monika Kumari twice. 22-year-old Monica was two months pregnant. The woman died on the same day of the incident.

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