RBI acts against two Edelweiss Group firms over evergreening concerns

The central bank has barred Edelweiss Asset Reconstruction Ltd from acquiring any financial assets and ECL Finance from undertaking any structured transactions other than repayment or closure of accounts.

The Reserve Bank of India on Wednesday imposed restrictions on two Edelweiss Group companies citing material concerns “arising out of conduct of the group entities acting in concert, by entering into a series of structured transactions for evergreening stressed exposures”. 

The central bank has barred Edelweiss Asset Reconstruction Ltd (EARCL) from acquiring any financial assets and ECL Finance from undertaking any structured transactions other than repayment or closure of accounts. 

Simply put, evergreening of loans is when borrowers with pending loans, often on the verge of default, are given new loans to repay outstanding debt. With this, the borrower is …

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Diti Pujara

Diti is a copy editor at The Morning Context. She joins us from Deccan Herald where she oversaw the daily news coverage in the digital vertical as a chief sub-editor. She also managed social media and contributed to data stories and film analysis. Before DH, she was with Reuters as an online producer.

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diti@mailtmc.com