The company announced this development through a statement to the stock exchanges and did not give any further details about the reasons for the RBI move.
The development came after the central bank had directed Edelweiss ARC to refrain from acquiring any stressed assets.
Last month, the RBI had highlighted 'material concerns' arising from the conduct of group entities.
These concerns arose from a series of transactions aimed at evergreening the stressed exposure of ARC's subsidiary – ECL Finance.
In its notification, the regulator barred ECL Finance from carrying out any structured transactions in respect of its wholesale exposure with immediate effect. However, it may continue to charge repayments and/or close accounts.
Additionally, the finance regulator has directed both the companies to enhance their assurance functions for regulatory compliance.
The restrictions imposed will be reconsidered only after satisfactory improvement as per RBI standards.
Following these developments, shares of the parent company - Edelweiss Financial Services - have fallen 8.2 per cent year to date.
The development came after the central bank had directed Edelweiss ARC to refrain from acquiring any stressed assets.
Last month, the RBI had highlighted 'material concerns' arising from the conduct of group entities.
These concerns arose from a series of transactions aimed at evergreening the stressed exposure of ARC's subsidiary – ECL Finance.
In its notification, the regulator barred ECL Finance from carrying out any structured transactions in respect of its wholesale exposure with immediate effect. However, it may continue to charge repayments and/or close accounts.
Additionally, the finance regulator has directed both the companies to enhance their assurance functions for regulatory compliance.
The restrictions imposed will be reconsidered only after satisfactory improvement as per RBI standards.
Following these developments, shares of the parent company - Edelweiss Financial Services - have fallen 8.2 per cent year to date.
