The RBI plans to introduce securitisation of stressed assets to help ease the burden of Non-Performing Assets (NPAs) for lenders.
This policy will allow lenders to bundle stressed assets into tradable securities, sharing the risk of NPAs.
It is an alternative to the existing Asset Reconstruction Company (ARC) route under the SARFAESI Act, 2002.
A resolution manager (RM) will be appointed by a special purpose entity (SPE) to oversee the securitisation process.
The RBI's proposal includes guidelines on valuation methods, capital requirements for investors, and necessary disclosures.
The securitised assets can only be sold to an SPE for cash.
Certain types of assets, like farm credit, education loans, fraudulent accounts, and wilful defaults, are excluded from securitisation.
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