The central bank’s move comes after reports that a 27-year-old woman was allegedly crushed by a tractor by third party debt recovery agents working on behalf of M&M Finance. Hazaribagh district of Jharkhand, due to which he died.
“The Reserve Bank of India has directed Mahindra & Mahindra Financial Services to immediately cease any recovery or forfeiture activity through outsourcing arrangement until further orders,” a notification issued. reserve Bank of India Told. “However, the said NBFC may, through its own staff, continue with the recovery or forfeiture activities.”
The central bank said the action is based on certain material supervisory concerns observed in M&M Finance with respect to the management of its outsourcing activities.
Local media reported that recovery agents were in the process of taking possession of the tractor after the farmer failed to repay the loan. However, during the incident an altercation broke out between the farmer, his daughter and the recovery agents.
“We are deeply saddened and disturbed by the Hazaribagh incident,” said Dr. Anish Shah, MD & CEO, Mahindra Group Said last week. “A human tragedy has happened. We will investigate this incident from all angles and will also investigate the practice of using third party collection agencies that have existed.
We will extend all possible cooperation to the authorities during the investigation of this tragic incident and above all we stand with the family in this hour of grief.