MUMBAI (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)
