Securitisation market in India grew 45% in FY 2016
Moneylife Digital Team 16 June 2016
The Securitisation Summit held in Mumbai witnessed a gathering of the market players; brain storming the prospects, challenges, issues, concerns and way forward of the securitisation industry in India. The Summit, witnessed one of the critical rendezvous of the stakeholders in the securitisation industry in India.
 
The Indian securitization market is poised to be looking up this year and hereafter, as the tax issues concerning securitization have largely been addressed. Also, foreign portfolio investors have been permitted (notification may be out soon, while the draft notification is out in the public domain) to invest in securitized debt instruments. The option for foreign investors to invest in securitization allows overseas financial entities to take a share of the lucrative, fast expanding retail borrowing space in India, without having to formally get into business in India. Public sector banks have not been active in the securitization space, except as buyers of priority sector receivables. 
 
All these were discussed at length at this one-day program, the key highlights of which have been presented below:
  • The securitisation market in India grew by 45% in the FY 2016.
  • Volumes of Asset Backed Securitisation increased by 51%.
  • MFI’s continue to dominate the ABS originations.
  • Priority sector lending continues to be the major driver for securitisation volumes in India.
  • The tax issues which was major hurdle for securitisation in India has been taken care off under the Union Budget 2016.
  • With the ease in the taxation norms, the demand for Non Priority Sector Lending portfolios is likely to rise.
  • Pricing of instruments will be the determining factor between PSLCs and securitisation.
  • The main reason for lagging behind of RMBS happens to be stamp duty and registration of documents.
  • The full report can be viewed here.
The event was organised by Vinod Kothari Consultants in association with the Indian Securitisation Foundation. 
Comments
Paddy Nair
10 years ago
Bad debts are not due to Raghuram Rajan.We need professional technocrats like him NOT bureaucrats if we are to manage our monetary policy well.The world is to complex now and bilateral & multilateral agreements may mess up our inflation,currency management & deficits
Ramesh Poapt
10 years ago
NPA,Bad debts, curse for banks but.......... windfall gain/ blessings/profit/growth for securitisation co.s! like sickness treatment for
doctors!
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