Edelweiss Financial share price falls 17% over RBI action: What central bank said

Edelweiss Financial share price: Edelweiss Financial share price opened 17 per cent lower at ₹64 against its previous close of ₹77.45.

Edelweiss Financial share price: The share price of Edelweiss Financial Services fell as much as 17 per cent in opening trade today (May 30). This comes after the Reserve Bank of India (RBI) imposed business restrictions on two Edelweiss group entities. The central bank ordered ECL Finance Ltd and Edelweiss Asset Reconstruction Co. Ltd (EARCL) to cease and desist from undertaking fresh activity with immediate effect. Following this, Edelweiss Financial share price opened 17 per cent lower at ₹64 against its previous close of ₹77.45.

Edelweiss Financial share price: Edelweiss Financial share price opened 17 per cent lower at ₹64.

RBI said that the two companies acted in concert “by entering into a series of structured transactions for evergreening stressed exposures of ECL, using the platform of EARCL and connected (alternative investment funds), thereby circumventing applicable regulations."

Edelweiss Financial Services said it reviewed the RBI order, adding, “We are dedicated to maintaining transparency and upholding the highest standards of corporate governance and committed to compliance with regulatory requirements. There will not be any material impact on the company’s resolution and recovery efforts, which will continue normally. We assure all our stakeholders that we are taking immediate steps to address the concerns raised by the RBI and to align our operations with regulatory expectations.”

"The reduction of the wholesale exposure will continue as permitted, in the normal course of business. We reaffirm our commitment to complying with the RBI recommendations and hope to resolve this within three weeks, as directed by the RBI," it said.