InvestorQ : Why has the RBI imposed a penalty on Bajaj Finance?
shrinidhi Rajan made post

Why has the RBI imposed a penalty on Bajaj Finance?

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6 months ago
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RBI imposed a monetary penalty of Rs.2.50 crore on Bajaj Finance for violation of rules pertaining to its recovery and collection methods. Section 58G of the RBI Act requires that banks and NBFCs can use recovery agents but they cannot resort to harassment, physical violence, threats etc. This was after repeated complaints about its recovery tactics.

RBI had issued a show-cause notice to Bajaj Finance as to why penalty should not be imposed for such non-compliance. The RBI concluded, after listening to the depositions of the Bajaj Finance management, that a kind of deterrent penalty was warranted. RBI has clarified that all NBFCs are entitled to recover their monies but mental, physical and psychological harassment must be avoided.

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