The Reserve Bank of India (RBI) today directed Mahindra & Mahindra Financial Services to immediately stop loan recoveries through external agents until further notice.

The directive follows a few days after Mahindra Finance’s outside loan recovery agents allegedly crushed a 27-year-old pregnant woman in Hazaribagh district in Jharkhand to death under the wheels of a tractor. 

The agent was forcibly taking away the vehicle, financed by the company, for non-payment of dues.

"This action is based on certain material supervisory concerns observed in the said NBFC, with regard to the management of its outsourcing activities," the RBI said today.

The central bank, however, has allowed the company to carry out recovery or repossession activities through its own employees.

“We will investigate this incident from all aspects and will also undertake an examination of the practice of using third-party collection agencies. We stand with the family at this moment of grief,” Mahindra Group managing director and CEO Dr Anish Shah said.