Wednesday, August 29, 2012

RBI norm to make banks shun loan securitisation

The securitisation market in India may shrink after the Reserve Bank of India (RBI) on August 21 curtailed credit enhancements on direct assignment deals (bilateral deals), whereby a loan which is sold from the books of an originator (often an NBFC, or a micro-finance institution or other financial institution) to an investor (often a bank, mutual fund or a private equity investor). This will result in fewer banks accessing the secur­itisation market to m­eet their priority lending ta­rgets. Banks are the big­gest investors in this segment.........

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