The Reserve Bank of India (RBI) on January 5 imposed a monetary penalty of Rs 2.50 crore on Bajaj Finance Limited for violation of rules pertaining to recovery and collection methods.
“This penalty has been imposed in exercise of powers vested in RBI under the provisions of clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58B of the Reserve Bank of India Act, 1934, 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. There were also persistent/repeat complaints about recovery and collection methods adopted by the company,” the RBI said.
A notice was issued to the company by the RBI, advising it to show cause as to why penalty should not be imposed for such non-compliance. After considering the company’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, the RBI concluded that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, the RBI 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,” the RBI said.
News Source:- Moneycontrol