The Reserve Bank of India (RBI) on Tuesday lifted the supervisory restrictions on ECL Finance and Edelweiss Asset Reconstruction Company, acknowledging their successful resolution of earlier concerns.
The restrictions were originally placed on May 29, 2024, due to regulatory concerns. However, both entities have now taken the necessary remedial actions and committed to ongoing compliance with the RBI’s regulatory guidelines, prompting the central bank to remove the limitations.
ECL Finance was directed to halt structured transactions related to its wholesale exposures, except for the repayment or closure of accounts in its normal course of business. Similarly, Edelweiss ARC was prohibited from acquiring financial assets, including security receipts (SRs), and reorganizing existing SRs into senior and subordinate tranches.
In its statement, the RBI said that both companies had worked with the bank and made the necessary changes to address its concerns. After reviewing the steps taken by the companies, the RBI confirmed that the issues had been resolved.
The restrictions were imposed under the Reserve Bank of India Act, 1934, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI).
Edelweiss Financial Services shares surged nearly 8 per cent to close at Rs 138.80 each on the BSE on Tuesday, in contrast to a 1.30 per cent decline in the benchmark index.
(With PTI Inputs)