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.
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