M&M Finance tanks 14% after RBI orders to stop using third party recovery agents
Published On: Friday, September 23, 2022 | By: Team KnowMyStock
Shares of Mahindra & Mahindra (M&M) Financial Services tanked 14 percent to Rs 192.05 in Friday’s intra-day trade, after the Reserve Bank of India (RBI) directed the company to immediately cease any recovery or repossession activities via an outsource till further orders. In its order, the RBI also mentioned that the non-banking finance company may continue with recovery or repossession activities through its own employees. The directive comes days after external loan recovery agents of Mahindra Finance allegedly crushed a 27-year-old pregnant woman in Hazaribagh district in Jharkhand to death under a tractor. The agent was forcibly taking the vehicle away, financed by the company, for non-payment of dues, a senior police official had told PTI."This action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities," RBI said in a statement.
Meanwhile, the company said that they repossesses around 4,000 to 5,000 vehicles per month in daily course of business via third-party agencies as well as their own employees. That said, the company expects this number to go down temporarily to around 3,000 to 4,000 per month, as they implement the RBI order with immediate effect.
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