RBI Lifts Restrictions On These Two Major Investment Entities - Details

The Reserve Bank of India (RBI) has removed the supervisory restrictions placed on ECL Finance Limited and Edelweiss Asset Reconstruction Company Limited, both of which are part of the Edelweiss Group.

The decision, announced on December 17, 2024, follows a period of engagement between the companies and the RBI to address the concerns that led to the imposition of these restrictions earlier this year.

In May 2024, the RBI had imposed business restrictions on ECL Finance Limited and Edelweiss Asset Reconstruction Company Limited due to supervisory concerns. ECL Finance was instructed to halt structured transactions concerning its wholesale exposures, limiting its activities to only the repayment or closure of accounts.

Meanwhile, Edelweiss Asset Reconstruction Company was prohibited from acquiring financial assets, including security receipts (SRs), and reorganising the existing SRs into senior and subordinate tranches.

These restrictions were implemented under the powers granted to the RBI by the Reserve Bank of India Act, 1934, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002. However, following remedial actions taken by both companies and their engagement with the RBI, the supervisory body has now lifted the imposed restrictions.

The RBI acknowledged that ECL Finance and Edelweiss Asset Reconstruction Company have addressed its concerns and are now in compliance with regulatory guidelines. The lifting of the restrictions is effective immediately, marking a positive development for both companies.

ECL Finance and Edelweiss Asset Reconstruction Company will now resume normal operations as per the established regulatory framework.