MANISH GUPTA
Ranchi, Sept 23: The Reserve Bank of India (RBI) has barred Mahindra Finance from using the services of a third party for loan recovery after a pregnant woman was crushed to death by their recovery agents in Hazaribagh on Thursday last week.
“The Reserve Bank of India has today, in exercise of its powers under section 45L(1)(b) of the Reserve Bank of India Act, 1934, directed Mahindra & Mahindra Financial Services Ltd (MMFSL), Mumbai, to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements, till further orders,” the RBI said in a statement on Thursday.
It may be noted that 27-year-old Monika Devi, daughter of disabled farmer Mithilesh Mehta and three months pregnant, was mowed down under the wheels of a tractor by the recovery agents of Mahindra Finance after the family failed to return the loan amounting to Rs 1.30 lakh. It was taken to purchase the tractor.
Taking cognisance of the matter, Mahindra Group Managing Director and CEO Anish Shah had come out with a statement saying that the company was deeply saddened and disturbed by the Hazaribag incident. He assured they would examine the practice of using third-party collection agencies and would support the investigation.
While the RBI took strict action against MMFSL, it has said that the non-banking finance company (NBFC) “may continue to carry out recovery or repossession activities, through its own employees”.
“This action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities,” the central bank added.
Four people were accused in the FIR filed at Ichak police station in Hazaribag. On Monday, Roshan Kumar Dev was arrested from the Mufassil police station area. The police had assured that the other absconding accused would be arrested soon.
