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Mahindra Finance looks to lower NPA through controlled repossessions
May 02, 2023
Mahindra & Mahindra Financial Services expects its non-performing assets to further reduce in the current fiscal as the non-banking finance company (NBFC) starts repossession of vehicles in a small and calibrated manner, vice-chairman and managing director Ramesh Iyer told FE.
“We believe that at least the same accounts which are in NPA, we will see improvement in that. We should realise that last year, since November onwards we have not resorted to major repossessions and settlements…if there are some delinquent accounts which require us to take out the asset and settle it, even that will be resorted so if you take the same pool of NPA assets, we are very confident that they will show downward trend,” Iyer said.
Following the Hazaribagh incident in September last year, which claimed the life of a young pregnant woman, the Reserve Bank of India (RBI) temporarily barred Mahindra Finance from using third-party agents for recovery and repossession activities. The RBI lifted the restriction in January after the NBFC tightened its process of onboarding third party agents.
“When we stopped repossession, I had said very clearly, repossession is last resort to solve recovery issues. When there are customers who say I want to surrender vehicle as I cannot earn, that is one type of repossession. Another is where we find that customers are intentionally not re-paying, they are using the assets but are not paying, we would use legal mechanisms to repossess our assets,” Iyer said.
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