BENGALURU (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)
