India’s Mahindra’s lending arm has seen a 75% drop in vehicle foreclosures on RBI orders. | Tech US News

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BENGALURU, Sept 23 (Reuters) – India’s Mahindra & Mahindra Financial Services (MMFSL) ( MMFS.NS ) said on Friday that its monthly vehicle receivables would temporarily fall by about 75 percent, the country’s central bank said. A day after the company was directed to discontinue use. Third-party services for repossession.

The company’s shares fell 10% to 201.35 rupees by 0414 GMT, their biggest intraday percentage slide in 17 months.

The Reserve Bank of India late on Thursday directed the company to stop using third-party services for collections till further orders, citing “material monitoring concerns”. Read more

Recent media reports indicated that a 27-year-old pregnant woman was crushed to death by a debt recovery agent, MMFSL, in an attempt to prevent the seizure of her father’s tractor over debt.

MMFSL said on Friday that it expects the number of repossessed vehicles to temporarily decline by around 3,000 to 4,000 vehicles per month, from 4,000 to 5,000 in the normal course of business. recaptured during The point of these limits.

The company said the ban on vehicle recovery by third-party agencies is not expected to have any material impact on its financials.

It said in a statement, “The company has not outsourced any collection activities in its vehicle finance business to any third-party agencies and therefore, the company has no impact on collections in this business.” is not expected,” he said in a statement.

A company spokesperson declined to elaborate, instead referring questions to the statement by Ramesh Iyer, vice-chairman and managing director of MMFSL.

“In light of the recent tragic incident, we have suspended third-party refunds and will further review whether to use third-party agents in the future,” Iyer said in a statement on Thursday.

Reporting by Nomiya Ganesh Acharya and Navedita Bhattacharjee in Bengaluru; Edited by Savio D’Souza

Our Standards: Thomson Reuters Trust Principles.

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