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A day after the Reserve Bank of India (RBI) directed Mahindra Financial Services to stop using third-party services for loan recovery, the company in an exchange filing today said that it expects repossession activity of vehicles to reduce temporarily.
“In the normal course of its business, the Company repossesses about 4000 to 5000 vehicles per month, using the third-party agencies and its own employees. The Company expects this number to go down temporarily by about 3000 to 4000 per month, as the Company implements the RBI order with immediate effect,” Mahindra & Mahindra Financial Services Limited said.
The company said it has not outsourced any collection activities in its vehicle finance business to any third-party agencies and does not expect any impact on collections in this business.
The Reserve Bank of India has, in exercise of its powers under section 45L(1)(b) of the Reserve Bank of India Act, 1934, directed Mahindra & Mahindra Financial Services Ltd. (MMFSL), Mumbai, to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements, till further orders, the RBI said in a statement.
However, the statement said NBFC may continue to carry out recovery or repossession activities, through its own employees, it 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 central bank added.
Mahindra Finance, a part of the Mahindra Group, is one of India’s leading non-banking finance companies. Focused on the rural and semi-urban sectors, the Company has over 8.1 million customers and has an AUM of over $11 Billion.
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
