By Malvika Gurung
Investing.com — Shares in rural non-banking finance company Mahindra and Mahindra (NS:) Financial Services (NS:) fell 13% to Rs 194.7 each at the time of writing, after falling around 14% Friday.
The title collapsed after the Reserve Bank of India ordered the company to immediately halt loan collections or repossession activities through outsourced agents until further notice.
Pursuant to the central bank’s order dated September 22, M&M Financial Services may continue loan recovery and repossession activities through its employees.
The supervision order was issued after a 27-year-old pregnant woman was allegedly crushed to death under a tractor driven by an external Mahindra Finance loan collector in Hazaribagh, Jharkhand on September 15, 2022.
“This action is based on certain material oversight concerns observed in the said NBFC, in relation to the management of its outsourcing business,” RBI said on Thursday.
In response to the banking regulator’s restriction, NBFC said it would not have a significant impact on either its collections or its finances.
“In the normal course of business, the company takes back approximately 4,000 to 5,000 vehicles per month, using third-party agencies and its own employees. We expect that number to temporarily decrease by around 3,000 to 4,000 per month,” M&M Financial Services said in an exchange filing.