India's central bank lifts restrictions on Edelweiss Group companies (updated)

Edelweiss Financial Services

17/12/2024 14:26

(Adds details from RBI's release in paragraph 2, background in
4 & 5)
       BENGALURU, Dec 17 (Reuters) - India's central bank on
Tuesday lifted restrictions on two Edelweiss Group companies
that barred them from acquiring financial assets or undertaking
structured transactions.
    The Reserve Bank of India (RBI) said it decided to lift the
curbs after the companies engaged with the regulator over the
concerns and after it was satisfied with the remedial measures
taken by them.
    RBI in May had penalised non-bank firm ECL Finance and
Edelweiss Asset Reconstruction Co saying that they had entered
into a series of structured transactions in 'evergreening' of
distressed loans of ECL.
    Evergreening refers to a practice where new loans are given
to stressed borrowers to enable them to repay existing loans. 
    The RBI has publicly warned against the practice, which is
typically aimed at masking the amount of stressed loans a firm
holds.

 (Reporting by Nishit Navin; Editing by Shailesh Kuber)
 ((Nishit.Navin@thomsonreuters.com;))