Outsourcing Of Loan Recovery Not Stopped But Expect Entities To Be On Right Side Of Law: RBI

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Mumbai: The Reserve Bank India on Friday clarified that it is not against the outsourcing of recovery activities by lenders, but expects them to be undertaken on the “right side of the law”.

The central bank last week barred Mahindra and Mahindra Financial Services from engaging third party agents for loan recoveries, after a video of a 27-year-old pregnant lady from Jharkhand’s Hazaribagh district allegedly being crushed to death under a tractor driven by recovery agents emerged.

Referring to the action taken against Mahindra Finance, RBI Deputy Governor M K Jain told reporters that it is not intended at taking away the right of regulated entities to pursue for their recovery. “What we expect is that it should be on the right side of the law,” he said at the post-policy press conference.

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