In a move signaling a return to normalcy for the Edelweiss Group, the Reserve Bank of India (RBI) has lifted business restrictions imposed on Edelweiss Asset Reconstruction Company Limited (EARCL) and ECL Finance Ltd in May 2024. This decision marks the culmination of months of scrutiny and remedial action, raising questions about the state of supervision in the non-banking financial sector (NBFC). The RBI’s initial action in May stemmed from supervisory concerns identified during routine examinations of the Edelweiss Group entities. The central bank, exercising its powers under the Reserve Bank of India Act, 1934, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), cited concerns regarding structured transactions, regulatory compliance, and related party transactions. Specifically, ECL Finance Ltd was directed to “cease and desist from undertaking any structured transactions in respect of its wholesale exposures, other than repayment and/or closure of accounts in its normal course of business.” This restriction significantly hampered ECL’s ability to conduct its core business operations. Simultaneously, EARCL was instructed to “cease and desist from acquisition of financial assets including security receipts (SRs) and reorganising the existing SRs into senior and subordinate tranches.” This restriction directly impacted EARCL’s