RBI Guidelines For Loan Recovery Agents: The Reserve Bank of India has clearly said on Friday that it is not against outsourcing the responsibility of recovery of loans by the lenders, but this work should be done within the legal framework.
RBI last week barred Mahindra & Mahindra Financial Services from taking outsourced services for recovery of its outstanding loans. Let us tell you that the RBI had taken this step after a video surfaced of a pregnant woman being crushed to death under a tractor run by a recovery agent in Hazaribagh, Jharkhand.
What did the Deputy Governor say?
RBI Deputy Governor MK Jain said about the steps taken against Mahindra Finance that there is absolutely no motive to take away the right of the central bank to make efforts to recover loans from the lending institutions. He said that “Our only expectation is that this work should be done within the legal framework.
action against the company
The Deputy Governor says that the RBI does not want that its move should have any effect on the lending institutions. It is clear with this that this action of RBI in this matter is against the company. Jain said that the RBI has already issued its guidelines regarding outsourcing the responsibility of recovery of loans. The central bank expects that financial institutions will conduct this activity in accordance with the approved policies. On this occasion, another RBI Deputy Governor Rajeshwar Rao says that a circular related to the responsibility of outsourcing and recovery agent of financial services has been issued in August.
Circular issued to all banks
RBI says that also stop incidents of harassing relatives, known people of borrowers. These circulars include all commercial banks, all non-bank financial companies, asset reconstruction companies, All India Financial Institutions and all primary urban cooperative banks. Banks) is applicable.