RBI denies Raj Kumar Bansal a reappointment as MD & CEO at Edelweiss ARC

The Reserve Bank of India has denied Edelweiss Asset Reconstruction Company’s (Edelweiss ARC) request to reappoint Raj Kumar Bansal as its Managing Director and Chief Executive Officer (CEO), on Tuesday, the firm has informed stock exchanges. Bansal is the MD and CEO of Edelweiss ARC and also serves as the Chairman of the Association of ARCs in India.

Alleging that Edelweiss ARC and ECL Finance, two entities under the Edelweiss Group, were “evergreening” troubled loans, RBI banned them from obtaining financial assets or participating in complex transactions on May 29. Evergreening is the practice of giving troubled debtors additional loans to help them pay back their previous debts and avoid being categorised as NPAs.

To guarantee compliance and reduce systemic risks, the RBI has increased its control of regulated businesses and expressed concerns about the way in which ARCs are operating.

Rajeshwar Rao, the Deputy Governor of RBI, highlighted last month how important it is for ARCs to have strong internal controls, good governance frameworks, and strong compliance cultures.