RBI Imposes Restrictions on Edelweiss Group Entities for Regulatory Violations

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RBI Imposes Restrictions on Edelweiss Group Entities

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The Reserve Bank of India has restricted Edelweiss Asset Reconstruction Company Ltd (EARCL) and ECL Finance Ltd for violating regulatory norms

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EARCL must stop acquiring financial assets and reorganizing security receipts into senior and subordinate tranches immediately, says RBI.

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The RBI found Edelweiss entities engaging in structured transactions to evergreen stressed exposures, bypassing regulations, and submitting incorrect valuations.

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The restrictions will be reviewed after Edelweiss addresses the RBI's supervisory concerns to its satisfaction. Shares of Edelweiss Financial Services fell 17% in today’s trading session.

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RBI Imposes Restrictions on Edelweiss Group Entities for Regulatory Violations