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The Reserve Bank of India has lifted the restrictions it had imposed on Mahindra & Mahindra Financial Services Ltd. The restrictions prevented the company from effecting any recovery or repossession activity through outsourcing arrangements.
On 22nd September 2022, the RBI had directed the non-banking finance company to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements till further orders.
The RBI then said that its action was based on certain material supervisory concerns observed in the NBFC with regard to the management of its outsourcing activities.
“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,” per the company’s regulatory filing.
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