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RBI On M&M Financial Services: Mahindra & Mahindra Financial Services has got a big relief from RBI. The company has informed that RBI has removed the ban imposed on the recovery of loans through third parties. The company has said that RBI has informed the company on January 4, 2023 that it has withdrawn the ban imposed on the recovery of loans through third parties.
RBI has taken this decision after the assurance of Mahindra & Mahindra Financial Services. The company has assured RBI that it will strengthen recovery practices and outsourcing arrangements. Along with this, strictness will be exercised in keeping third party agents in loan recovery practice. The company has told RBI that it will also work to strengthen the framework for fixing accountability under the action plan approved by the board.
In September 2022, RBI issued an order to Mahindra & Mahindra Financial Services Ltd. and said that till further orders, the company will not recover the loan by outsourcing through third party. RBI had said in its order that Mahindra & Mahindra Financial Services can do loan recovery only through its employees. Several irregularities were found in the outsourcing activity of Mahindra & Mahindra Financial Services in the RBI investigation.
After the recovery agent of Mahindra Finance crushed the daughter of a disabled farmer with a tractor for not depositing the loan in Hazaribagh, Jharkhand, taking the matter seriously, the RBI had issued an order to Mahindra & Mahindra Financial Services Limited, saying that till further orders The company will not recover the loan by outsourcing through third party.
Actually the finance personnel had come to take the tractor. 10,000 interest was to be paid on the loan of the tractor. There was a tussle between the father of the pregnant woman and the finance personnel for taking the same amount of interest. The finance personnel allegedly trampled the farmer’s elder daughter Monika Kumari twice. 22-year-old Monica was two months pregnant. The woman died on the day of the incident itself.
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