Register


3 months Free Trail

Get world class research developed by an in house team of professionals backed with strong institutional support. With reports that span across time horizons, styles and easily actionable strategies, you are never too far from executing a winning trade.

Key features and benefits of Registeration :
  • My Portfolio : Access 360° View not only of your Portfolio with Emkay, but all your Investment Portfolios
  • Emkay Research : Get Emkay's exclusive Research Reports & Trading Ideas.
  • My Watch list : Track your favorite stocks, Derivatives, Currencies, Commodities, Mutual funds on the go
  • Markets : Grab Stock Market Information at your fingertips
  • News & Announcements : Stay Updated 24x7 with news that matters.
  • Alerts : Get Alerts on Emkay Research, Trading Ideas, news on your portfolio holdings & watchlist

Forgot password

Change password

Forgot Customer Code

Would you like to create a personalised login id for logging in to Emkay Website ?

Change Personalised Login ID

RBI eases norms for NBFCs to securitise loan books

Share Source By

Dion Global

30 Nov 2018

The Reserve Bank of India (RBI) Thursday relaxed norms for NBFCs to securitise their loan books, a move likely to ease the stress in the sector facing a crisis of confidence.

As per a notification of the RBI, non-banking financial companies (NBFCs) have been permitted to securitise loans of over five-year maturity after holding them for six months on their books.

"In order to encourage NBFCs to securitise/assign their eligible assets, it has been decided to relax the Minimum Holding Period (MHP) requirement for originating NBFCs, in respect of loans of original maturity above 5 years, to receipt of repayment of six monthly instalments or two quarterly instalments ...," RBI said.

The central bank has also prescribed certain Minimum Retention Requirement (MRR) for NBFCs for availing the relaxed norms.

The relaxed dispensation, RBI added, will be applicable to securitisation/ assignment transactions carried out during a period of six months.

Commenting on the RBI's move, Vibhor Mittal, Group Head (Structured Finance), ICRA said the relaxation in MHP criteria would primarily benefit housing finance companies and NBFCs offering mortgage loans where the loan tenure is typically more than five years.

"A greater proportion of their loan book would now become eligible for securitisation," Mittal.

Accordingly, these entities can raise more funds through the securitisation route, which will provide them with additional liquidity, Mittal added.

NBFCs and HFCs are facing a crisis of confidence following the default by IL&FS in late-August, which led to its takeover by the government last month. This, in turn, led to a liquidity crunch for the sector.