BREAKING: RBI bans Mahindra Finance from making recovery through third party

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The Reserve Bank of India (RBI) on Thursday banned financial firm Mahindra Finance from carrying out any recovery or repossession activities through outsourcing deals. However, the company may continue to conduct recovery activities through its own employees, the banking regulator said.

“This action is based on some significant supervisory concerns observed in the said NBFC (non-bank financial company), in relation to the management of its outsourcing business,” the RBI said.

RBI’s action comes just days after a pregnant woman, Monika Devi, was crushed to death under the wheels of a tractor being forcibly taken away by recovery workers in the Hazaribagh district of Jharkhand.

Later, a 26-year-old man, Roshan Singh, was arrested by Hazaribagh police. Hazaribagh SP Manoj Ratan Chothe told PTI that Singh was the third party vendor engaged by the finance company. “Roshan is among four named in the FIR filed after the death of Monika Devi,” said Ichak Police Station Chief Dhananjay Singh.

According to the agency’s report, a family member of the deceased claimed that debt collectors and the manager of Mahindra Finance became angry when his father Mithilesh Mehta sought to see proof of their identity. The family member also said that officers messaged Mithilesh over the phone to repay the loan of Rs 1.30 lakh.

The recovery agents allegedly insisted that Mithilesh pay the full amount or else they would take the tractor away. Mithilesh reportedly offered to clear Rs 1.20 lakh immediately. However, officers disagreed and went to seize the tractor. Monika Devi had rushed to the scene with her father to stop the officers, but she was crushed under her wheels.

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