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MFI & Microfinance

MFI Agent Seized Household Goods or Property

An MFI recovery agent has taken household goods, agricultural equipment, jewellery, or any other property from your home as "security" for a defaulted microfinance loan.

Applies to: All NBFC-MFIs and microfinance lendersRBI/2021-22/112 — Collateral-free mandate

⚖️Your Rights Under RBI Regulations

All microfinance loans are collateral-free by law — MFIs cannot take any property as security.

If a loan is secured by collateral, it is not a microfinance loan and different rules apply.

Seizure of household property by an MFI agent without a court order is ILLEGAL — it is theft under IPC.

The MFI is vicariously liable for the agent's actions.

💰 What You Can Recover

Immediate return of seized property or market value compensation. Criminal liability for the agent and the MFI.

⏱ Response Deadline

File FIR immediately — this is a criminal matter.

📋Step-by-Step — What to Do

1

File FIR at local police station immediately — name both the agent and the MFI.

2

Write to the MFI's GRO demanding immediate return of seized property.

3

Write to the RBI Ombudsman and to the MFI's SRO (Sa-Dhan or MFIN).

4

Approach District Magistrate if police are unresponsive.

🏛 Where to Escalate If Bank Doesn't Respond

Local Police (FIR) + RBI Ombudsman + District Magistrate

⚖️

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Governing RBI Circular
RBI/2021-22/112 — Collateral-free mandate
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