Action against Mahindra & Mahindra Financial Services Ltd., under Section 45L(1)(b) of the Reserve Bank of India Act, 1934
Case Brief
RBI, acting under Section 45L(1)(b) of the RBI Act, 1934, directed Mahindra & Mahindra Financial Services Ltd. (MMFSL), Mumbai, to immediately cease recovery or repossession activity through outsourcing arrangements until further orders. The NBFC is still allowed to carry out recovery or repossession through its own employees. RBI said the direction was issued due to material supervisory concerns relating to the management of MMFSL's outsourcing activities.
Under Section 45L(1)(b) of the RBI Act, 1934, RBI directed Mahindra & Mahindra Financial Services Ltd. (MMFSL), Mumbai, to immediately cease carrying out any recovery or repossession activity through outsourcing arrangements till further orders. The company may continue recovery or repossession activities through its own employees. RBI said the action was based on certain material supervisory concerns observed in the NBFC regarding the management of its outsourcing activities.
Severity Assessment
This is a targeted prohibition on a specific activity (outsourced recovery/repossession), which fits the structural severity floor of 3 and is not a broad business restriction.
MMFSL must halt all outsourced recovery and repossession activity immediately and route such work only through its own employees. Borrowers and customers affected by collections/repossessions may see changes in how these activities are conducted, while the restriction remains in force until further orders.
Published as Mahindra & Mahindra Financial Services Ltd.
RegOversight structures the official RBI release for search and analysis. Use the linked release as the authoritative source.
© 2026 RegOversight by OddVector