RBI lifts ban on M&M Finance for outsourcing recovery, repossession agents

On September 22, the regulator barred Mahindra Finance from carrying out any recovery or repossession activity through outsourced agents

RBI, borrowings, Indian economy
Photo: Bloomberg
Manojit Saha Mumbai
2 min read Last Updated : Jan 05 2023 | 12:05 AM IST
The Reserve Bank of India (RBI) has lifted the ban on Mahindra & Mahindra Finance for outsourcing recovery and repossession agents with immediate effect, the non-banking finance company (NBFC) informed the exchanges.

On September 22, the regulator barred Mahindra Finance from carrying out any recovery or repossession activity through outsourced agents, after reports that a woman was crushed to death in Jharkhand’s Hazaribagh district, while she was trying to stop a loan recovery agent working on the company’s behalf from seizing her father’s tractor over loan dues.

Mahindra Finance said the ban was lifted after the company assured the RBI to strengthen recovery practices and outsourcing arrangements.

“Based on the submissions made by the company and its commitment to strengthen its recovery practices and outsourcing arrangements, tighten the process of onboarding third party agents and strengthen accountability framework as per its Board approved action plan, the RBI, vide its letter dated 4th January 2023, has informed the Company of its decision to lift the aforementioned restrictions imposed on the Company with immediate effect,” the notification to the exchanges said.

In an interview to Business Standard, Mahindra Finance MD & CEO Ramesh Iyer had said it was not possible to completely do away with repossession agents. “These are specialised people. We believe repossession is a specialised act,” Iyer had said.

Separately, the NBFC, while sharing its business update for the September-December quarter, said the momentum continued on the back of a positive macroeconomic environment.

“The Q3 disbursements at approximately Rs 14,450 crore registered a growth of 80 per cent YoY. The YTD disbursement of approximately Rs 35,750 crores registered a YoY growth of 95 per cent,” it said. In December itself, disbursements were Rs 4,650 crore.

The collection efficiency was at 98 per cent for December 2022. The current quarter’s collection efficiency was similar to that of last year at 95 per cent, the company said.

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :M&M FinanceRBINBFC

Next Story