Securitisation: Prospects and Issues

The Indian securitization market has seen a rapid progress in the last few years. The progress has been in terms of both volume and complexity of the transactions completed. Even though the market is presently at a nascent stage and young compared to the developed western markets, it is maturing fast and the players are gaining experience in putting together complex securitization deals. Securitization in India started off with a portfolio of auto loans and has continued to be a predominantly asset-backed market. Asset categories that have been securitized include auto loans, commercial vehicles, equipment leasing, residential mortgages and other credit products such as CDOs (Collateralized Debt Obligations). The Indian securitization market, even though growing at a brisk pace, is riddled with bottlenecks, such as lack of clear accounting guidelines and standardization of products, lack of a developed secondary market, high stamp duty and unfriendly foreclosure laws. These are cited to be the causes for the slowing down of the market in recent times. Some of the asset classes that are common in developed countries such as CMBS, synthetic securitizations etc., are yet to be offered in India. A better developed regulatory environment and public sector bank participation would provide the impetus and put the market on a stronger growth trajectory. In this scenario, when the Indian securitization market is at the crossroads, this book “Securitization – Prospects and Issues” makes a comprehensive assessment of the securitization market in the country and presents to the readers an ongoing, dynamic commentary on the happenings in the market.