RBI Eases Restrictions on Edelweiss Group Companies

In a significant move, the Reserve Bank of India (RBI) has lifted restrictions on two companies of the Edelweiss Group, allowing them to resume acquiring financial assets and undertaking structured transactions. The central bank imposed these restrictions in May, penalizing non-bank firm ECL Finance and Edelweiss Asset Reconstruction Co for their involvement in 'evergreening' distressed loans.

Evergreening, a practice where new loans are given to stressed borrowers to repay existing loans, has been publicly warned against by the RBI due to its potential to mask the true extent of stressed loans held by a firm.

The RBI's decision to lift the restrictions follows the companies' engagement with the regulator and the implementation of remedial measures satisfactory to the central bank.