New Delhi: Following RBI’s directive prohibiting Mahindra & Mahindra Financial Services Ltd (MMFSL) from engaging a third party for recoveries in the event of default, the company said it has halted foreclosures through third-party agents.
In a late Thursday evening communication, Mahindra Finance said it has a detailed policy in place for third-party compliance with regards to repossessing vehicles.
“In light of the recent tragic incident, we have halted third party repossessions and will further examine if and how third party agents will be used in the future,” said Ramesh Iyer, Vice President and General Manager of Mahindra Finance, in the press release. statement.
Following the death of a 27-year-old pregnant woman in the Hazaribagh district of Jharkhand who was allegedly crushed to death under the wheels of a tractor by recovery workers last week, the Reserve Bank on Thursday banned MMFSL to carry out any recovery or repossession activities by third party agents with immediate effect until further notice.
The RBI said the Non-Banking Financial Company (NBFC) may continue to carry out recovery or repossession activities through its own employees.
This action is based on some significant oversight concerns observed in the said NBFC in relation to the management of its outsourcing activities, the RBI added.
In connection with the woman’s death, the police had arrested a certain Roshan, an employee of Team Lease, a firm contracted by Mahindra Finance.
Mahindra Group Managing Director and Managing Director Anish Shah had expressed his condolences over the death and assured that the incident would be fully investigated.