The Reserve Bank of India (RBI) has imposed a fine of Rs 2.5 crore on Bajaj Finance Limited. The reason behind this is the violation of various instructions including recovery and collection procedures. The RBI has said in a statement that the specific instructions given to the company to ensure full compliance of the Fair Practices Code (FPC) in ‘Letter and Spirit’ have also been violated.
The statement said that the company has failed to ensure that Bajaj Finance’s recovery agents do not resort to harassment or intimidation as part of their efforts to recover debt from customers. Hence, the penalty has been imposed in view of the failure of Bajaj Finance to follow the instructions issued by RBI. There have also been repeated complaints against the company regarding recovery and collection methods.
Show cause notice was issued
It was further stated that a show cause notice was issued against Bajaj Finance as to why the company should not be fined for not following the rules. After considering the company’s reply to the notice, oral submissions during the hearing and additional submissions made by Bajaj Finance, the RBI came to the conclusion that the charges were proved for not following the instructions and hence the company was fined is.
Transactions with the customer will not be affected
However, the RBI has also said that action against Bajaj Finance is based on lack of regulatory compliance. Its purpose is not to pass judgment on the validity of any transaction or agreement between the customer and the company.