There was also violation of a specific direction to the company to ensure full compliance with Fair Practices Code (FPC) in "letter and spirit", the central bank said in a release.
The Reserve Bank on Tuesday said it has imposed a penalty of Rs 2.5 crore on Bajaj Finance Limited, Pune for violation of various directions, including on recovery and collection practices.
There was also violation of a specific direction to the company to ensure full compliance with Fair Practices Code (FPC) in “letter and spirit”, the central bank said in a release.
“This penalty has been imposed…taking into account the failure of the company to ensure that its recovery agents did not resort to harassment or intimidation of customers as part of its debt collection efforts and thereby failing to adhere to the aforesaid directions issued by RBI,” it said.
There were also persistent/repeat complaints about recovery and collection methods adopted by the company, RBI added.
It further said a show cause notice was issued to the company as to why penalty should not be imposed for such non-compliance.
After considering the company’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI concluded that the charge of non-compliance with the directions was substantiated and warranted imposition of monetary penalty, the release said.
The RBI, however, added the action against Bajaj Finance 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.