RBI lifts restrictions on Mahindra Finance for loan recovery through outsourcing; stock gains ~1%

5 Jan 2023 , 10:29 AM

Mahindra Finance Limited informed that restrictions imposed on the company by RBI have been lifted.

The Reserve Bank of India directed Mahindra & Mahindra Financial Services to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements until further orders. The restriction was imposed on September 22, 2022.

According to a BSE statement, based on the company’s submissions and commitment to strengthen its recovery practices and outsourcing arrangements, tighten the process of onboarding third-party agents, and strengthen the accountability framework as per its Board approved action plan, the RBI, in a letter dated January 4, 2023, informed the company of its decision to lift the restrictions imposed on the company with immediate effect.

Mahindra Finance may be able to continue recovery or repossession efforts through its own employees. Third-party recovery agents are used by non-banking financial institutions to reduce costs.

Following this development, Mahindra Finance was trading 1.17% higher at Rs236.85, against the previous close of Rs234.10 on NSE. The counter touched an intraday high and low of Rs240.90 and Rs236 respectively.

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