RBI asks M&M Finance to stop recovery activity through third party

New Delhi, Sep 22 (Agency) The Reserve Bank of India (RBI) has asked Mahindra & Mahindra Financial Services Ltd (MMFSL) to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements. The NBFC may, however, continue to carry out recovery or repossession activities, through its own employees.

‘The action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities,’ a statement from the RBI said on Thursday. The development has come after a pregnant woman reportedly died in Hazaribagh district of Jharkhand after being mowed down by a tractor allegedly driven by a recovery agent of the finance company.