RBI Initiates Action Against M&M Financial After Pregnant Woman Dies During Loan Recovery
RBI asks M&M Financial to stop recoveries through third-party recovery agents.
The Reserve Bank of India on Thursday initiated action against Mahindra & Mahindra Financial Services Ltd. and asked the lender to cease all recovery and repossession arrangements through third-party agents with immediate effect.
Mahindra & Mahindra Financial may continue with recovery and repossession efforts through its own employees, the RBI said in a statement. "This action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities," the RBI said.
Last week, during a repossession of a tractor in Hazaribagh, Jharkhand, a recovery agent of the NBFC had gotten into an altercation with the borrower's family. The borrower's pregnant daughter was allegedly crushed to death under the wheels of the tractor, Press Trust of India reported.
The police is currently investigating the matter, after registering a case of murder against four individuals.