Bajaj Finance Slapped With Rs 2.5 Crore Penalty: Their Recovery Agents Are Harassing Customers
Bajaj Finance, one of the leading banks of India has been slapped with a penalty of Rs. 2.5 crores. The penalty is because the bank has violated the fair practices code (FPC) and other directions issued by the Reserve Bank of India.
Apparently, multiple complaints have been received from customers about the loan recovery methods practiced by the bank.
Read on to find out all the details!
Bajaj Finance Imposed With Monetary Penalty Of Rs. 2.5 Crores
A monetary penalty of Rs. 2.5 crores has been imposed on Bajaj Finance by the apex bank for violating its directions on fair practices code (FPC) and outsourcing of financial services by a non-banking financial company.
As per the notification issued by the RBI, Bajaj Finance has violated a “specific direction to the company to ensure full compliance with FPC in letter and spirit.” Also, the bank has neglected to make sure that loan recovery agents did not harass or intimidate its customers as part of the debt collection efforts. This means that they haven’t adhered to the directions issued by RBI.
The RBI has also stated that there have been repetitive complaints about the recovery and loan collection methods practiced by the company. Recently,
Penalty Imposed After Bank Issued After Show Cause Notice
This penalty has been imposed after the bank was issued a notice asking to show cause as to why the penalty should not be imposed.
However, after taking into consideration the reply by the company, oral submissions made during the personal hearing, and examination of additional submissions, RBI has stated that the charge of non-compliance was substantiated and also warranted the imposition of monetary penalty.
RBI has stated, “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.”
Bajaj Finance is a non-banking financial company (NBFC) and has reported assets under management of Rs. 1.04 lakh crore as of 30 September 2020.