New Delhi: In a major step, the Reserve Bank of India on Thursday barred the use of third-party recovery agents or outsourcing companies for loan recovery by Mahindra Finance.
RBI in a statement added that “the Reserve Bank of India Act, 1934, directed Mahindra & Mahindra Financial Services Ltd. (MMFSL), Mumbai, to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements, till further orders.”
The statement further added that the finance company may continue to carry out recovery or repossession activities, through its own employees.
The order comes days after a pregnant lady was allegedly crushed to death by a recovery agent trying to take a tractor away after the family failed to repay the loan instalment in Jharkhand’s Hazaribagh district.