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RBI restrains Mahindra Financial Services from collecting loans through third party agents SEDI News

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RBI’s decision comes after the death of a 27-year-old pregnant woman in Jharkhand’s Hazaribagh district, who was crushed to death by a recovery agent last week, allegedly under the wheels of a tractor for non-payment of dues. .

The central bank said in a statement that Mahindra & Mahindra Financial Services through its employees may continue the activities of recovery or possession.

“The Reserve Bank of India has today directed Mahindra & Mahindra Financial Services Limited, Mumbai to immediately cease any recovery or possession activity through outsourcing arrangement,” the statement said.

RBI said that this action is based on supervisory concerns observed in the outsourcing arrangement of the said NBFC (Non-Banking Financial Company).

In connection with the woman’s death, the police arrested Roshan, an employee of a Mahindra Finance firm ‘Team Lease’.

Mahindra Group CEO and Managing Director Anish Shah condoled the woman’s death and assured that all aspects of the incident would be investigated. He has also talked about examining the practice of collecting loans through third party agents.

As reported by The Mint, Mahindra & Mahindra Financial Services Limited is part of the Mahindra Group, one of India’s leading non-banking finance companies (NBFCs).

NBFC is the major vehicle and tractor financing company. It provides loans to SMEs (Small and Medium Sized Enterprises) by offering fixed deposits.

According to the report of news agency PTI, on September 15, a pregnant woman was allegedly crushed to death by a tractor by a recovery agent in Hazaribagh district of Jharkhand.

The woman was the daughter of a particularly capable farmer, Mithilesh Mehta. She was three months pregnant.

According to the police, Mehta had received a message from Mahindra Finance Company on his mobile phone on September 15, asking him to pay the loan (Rs 1.3 lakh) taken from the firm to buy a tractor.

The company had also threatened to take back the tractor, which was parked at a nearby petrol pump on NH-33, if the money was not paid.

According to the police, Mehta immediately reached the spot to save the tractor and found that a recovery agent was already driving his tractor.

He ran after the moving tractor and told the recovery agent that he was ready to pay Rs 1.2 lakh immediately, but the person insisted that if he wanted possession of the tractor, the full dues would have to be paid.

The recovery agent refused to listen to their arguments and kept driving the tractor. Meanwhile, the pregnant daughter of the farmer also reached the spot and ran after her, when the agent crushed her with a tractor, due to which she died.

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Categories: India

Tagged as: Anish Shah, Hazaribagh, Jharkhand, M&M, M&M Financial, Mahindra & Mahindra Financial Services, Mahindra group, Non-Banking Finance Company, Outsourcing Arrangements, Pregnant Woman Killed, RBI, Recovery Activity, Recovery Agent, Repossession Activity, Reserve Bank of India, Third-Party