The Reserve Bank of India (RBI) imposed a penalty of Rs 2.50 crore on Bajaj Finance for infringement of codes regulating the methods used to recover fees, among others. The RBI argued that Bajaj Finance failed to ensure that its recovery agents did not harass or use other intimidation tactics during recovery.
The company was found to be in violation of the instructions issued “on Managing Risks and Code of Conduct in Outsourcing of Financial Services by NBFCs and Fair Practices Code (FPC) for applicable NBFCs… and a specific direction to the company to ensure full compliance with FPC in letter and spirit,” a statement from RBI said.
“This penalty has been imposed… taking into account the failure of the company to ensure that its recovery agents did not resort to harassment or intimidation of customers as part of its debt collection efforts and thereby failing to adhere to the aforesaid directions issued by RBI,” it said.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.”