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RBI Asks Mahindra Finance Not To Use Outside Agents After Loan Collectors Kill Pregnant Woman

Mahindra & Mahindra Financial Services Ltd. was directed by the Reserve Bank of India to no longer use outside recovery agents. This comes after a pregnant woman was mowed down in Jharkhand by a recovery agent of the company.

RBI instructed the finance company Mahindra & Mahindra Financial Services Ltd. to immediately stop carrying out any recovery through outsourcing agents. This was in response to the incident in Jharkhand’s Hazaribagh where a pregnant woman was allegedly mowed down under the wheels of a tractor by a recovery agent of the finance company.
Local police of Hazaribagh told media outlets that the officials of the finance company did not inform the local police station before going to the residence of the victim for the recovery of the tractor.

In a statement, RBI said, “directed Mahindra & Mahindra Financial Services Ltd. (MMFSL), Mumbai, to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements, till further orders.” “However, the said NBFC may continue to carry out recovery or repossession activities, through its own employees,” it added.
RBI said, this action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities.

The woman who was killed by Mahindra’s recovery agent was the daughter of a specially-abled farmer. The recovery agent refused to listen to the farmer’s plea and kept on driving the tractor when his pregnant daughter ran after the vehicle and was crushed to death under its wheels. She was three months pregnant.

Later, Mahindra Group’s CEO and MD Anish Shah said, “we will investigate this incident from all aspects and will also undertake an examination of the practice of using third-party collection agencies that has been in existence.”

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