Bajaj Finance, one of India’s leading non-banking financial companies, is in the spotlight due to allegations of ruthless recovery practices and aggressive loan outreach. The company, which has a market capitalization of over $60 billion, has been accused of employing strong-arm tactics to recover loans.
According to reports, Bajaj Finance has hired third-party recovery agents who use abusive language, harass borrowers and their families, and resort to physical violence. The company has denied the allegations and stated that it has a strict code of conduct that prohibits such behavior.
However, several borrowers have come forward with stories of harassment and intimidation by recovery agents. In one case, a borrower alleged that a recovery agent threatened to kill him if he did not repay his loan.
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The aggressive loan outreach practices of Bajaj Finance have also come under scrutiny. The company has been accused of targeting vulnerable sections of society, such as low-income earners and small business owners, and offering them high-interest loans.
Critics have pointed out that the high-interest rates charged by Bajaj Finance can trap borrowers in a debt cycle, and the company’s aggressive collection practices can worsen their financial situation.
In response to the allegations, Bajaj Finance has stated that it complies with all regulations and has a robust grievance redressal mechanism in place. The company has also announced measures such as the introduction of a “cooling-off” period before disbursing loans and the discontinuation of the practice of hiring third-party recovery agents.
However, the allegations have put a dent in the company’s reputation, with its stock price falling by more than 10% in a single day. The Reserve Bank of India has also taken note of the allegations and has directed the company to conduct a detailed audit of its lending and recovery practices.
The spotlight on Bajaj Finance is part of a broader scrutiny of non-banking financial companies in India. The collapse of several such companies in recent years has raised questions about the regulatory framework governing these companies and the practices they employ.
