India cenbank rejects reappointment of Raj Kumar Bansal as MD, CEO of Edelweiss ARC

Edelweiss Financial Services

11/06/2024 05:05

MUMBAI, June 11 (Reuters) - India's central bank has
rejected Edelweiss Asset Reconstruction Company's request to
reappoint Raj Kumar Bansal as its managing director and chief
executive officer, the firm said in an exchange filing on
Tuesday.
    Bansal is currently the MD and CEO of Edelweiss ARC and is
also the chairman of the Association of ARCs in India.
    The Reserve Bank of India (RBI) on May 29 barred Edelweiss
ARC and ECL Finance, an Edelweiss Group entity, from acquiring
financial assets or undertaking structured transactions, saying
they engaged in "evergreening" distressed loans.
    Evergreening refers to a practice where new loans are given
to stressed borrowers to enable them to repay existing loans. 
    The RBI has flagged concerns over the functioning of ARCs
and has increased its supervision of regulated entities to
ensure compliance and to prevent systemic risks. 
    RBI deputy governor Rajeshwar Rao last month stressed the
need for strong governance frameworks, robust internal controls,
and a strong compliance culture in ARCs.

 (Reporting by Siddhi Nayak; Editing by Mrigank Dhaniwala)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Twitter: https://twitter.com/siddhiVnayak))