Earlier, the RBI had imposed restrictions on Edelweiss ARC, prohibiting it from acquiring distressed assets until further notice. These measures were part of efforts to strengthen governance and risk management frameworks within the ARC sector, which plays a pivotal role in resolving non-performing assets (NPAs) in the banking system.

The rejection of the CEO's reappointment underscores the RBI's scrutiny over leadership appointments within ARCs, emphasising the need for robust governance and adherence to regulatory guidelines.