The Reserve Bank of India (RBI) has lifted the ban on Mahindra & Mahindra Financial Services (M&M Finance) for outsourcing recovery operations using third- party collection agents.

On 22 September 2022, the central bank had imposed restrictions on the non-banking financial company (NBFC), citing ‘material supervisory concerns’. 

A 27-year-old pregnant woman was allegedly crushed to death on 15 September 2022 in Jharkhand’s Hazaribagh district while trying to stop a loan recovery agent, working on behalf of M&M Finance, from seizing her differently-abled father’s tractor over loan dues.

M&M Finance said on Wednesday that the ban was lifted with immediate effect following assurances given by the company to the RBI to strengthen its recovery practices and outsourcing arrangements. The NBFC also assured that it would tighten the process of onboarding third-party agents and strengthen its accountability framework.

“The RBI, vide its letter dated 4 January 2023, has informed the company of its decision to lift the aforementioned restrictions imposed on the company with immediate effect," the non-bank lender said on Wednesday.