The Reserve Bank of India (RBI) announced that it imposed an Rs. 2 crore penalty on the Pune branch of Bajaj Finance, which is a part of Bajaj Holdings and Investments Ltd. and an Indian financial services company on Tuesday, January 5th, 2021. This was done due to certain violations of various directions, including recovery and collection practices. There also happens to be a violation of a very specific kind to the company to ensure full adherence with the Fair Practices Code (FPC).
The RBI said that they imposed the penalty taking into account the failure of the non-banking financial company, Bajaj Finance, to ensure that its recovery agents did not resort to any kind of harassment or intimidation of customers to collect debts and thereby failing to adhere to the aforementioned directions issued by RBI. Failure to do so has led to this penalty. The RBI also added that they got repeated complaints about the recovery and collection methods adopted by the company.
It further said a show-cause notice had been issued to the company deciding on whether the penalty should be imposed for such non-compliance and why.
After making considerations to the company’s reply to the notice, oral submissions that were made during a personal hearing, and the examination of additional submissions that were made by it, the RBI concluded that this charge of a non-compliance with the directions was upheld and warranted imposition of monetary penalty, according to the release.
The Reserve Bank of India further added that the said action against Bajaj Finance has been purely based on the deficiencies in regulatory compliance and is not meant to be pronounced upon the validity of any transaction or agreement that may have been entered into by the company with its customers. More information on this issue is yet to be gathered.