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-in-law 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.