RBI ban on M&M recovery agents

The RBI barred Mahindra & Mahindra Financial Services from appointing any agents for recovery or repossession. The move comes in the wake of the private lender’s recovery agents mowing down a pregnant borrower during a vehicle repossession in Hazaribagh, Jharkhand.

Recently recovery agents of Mahindra & Mahindra Financial Services, while repossessing a tractor from a borrower Mithilesh Kumar Mehta, ran over his 22-year-old pregnant daughter, who had asked to see their identity cards. Following an uproar, M&M Financial Services said it would investigate and review the practice of using third-party collection agencies.

RBI stepped in, while allowing the lender to continue with recovery activities using its employees. “This action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities,” it said.