RBI restrains M&M Financial Services from outsourcing recovery activity
The Reserve Bank of India (RBI) on Thursday 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,” the RBI said in a circular.
“This action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities,” the regulator added. The action had been initiated by the RBI in exercise of its powers under section 45L(1)(b) of the Reserve Bank of India Act, 1934.