Wednesday, February 23, 2011

Securitisation volumes fall by a third in Apr-Dec

New RBI norms, hardening rates, liquidity concerns curb appetite.  Hit by a slump in single corporate loan sell downs, securitisation volumes shrank in April-December 2010 to Rs 18,800 crore from Rs 28,200 crore in the year-ago period, according to ratings agency Icra. Securitisation is the process of converting existing assets or future cash flows into marketable securities. Typically, loans in segments such as vehicle, home and corporate are pooled and packaged into securities. The repayments from borrowers are assigned to investors in securities. The Reserve Bank of India (RBI) has proposed stringent norms for securitisation, hardening interest rates.

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