Revisions to the Guidelines on Securitisation Transactions - आरबीआई - Reserve Bank of India
Revisions to the Guidelines on Securitisation Transactions
RBI/2011-12/540 May 07, 2012 The Chairman and Managing Director / Chief Executive Officer of Dear Sir, Revisions to the Guidelines on Securitisation Transactions Please refer to the paragraph 107 (extract enclosed) of the Monetary Policy Statement 2012-13 announced on April 17, 2012 on issuance of final guidelines on securitisation. With a view to developing an orderly and healthy securitisation market and ensuring greater alignment of the interests of the originators and the investors, it was considered necessary to prescribe a minimum lock-in-period and minimum retention criteria for securitised loans originated and purchased by banks and NBFCs. Accordingly, a discussion paper and draft guidelines on securitisation transactions were issued in April 2010 for public comments. After considering the feedback received and international developments during the intervening period, revised draft guidelines were issued for public comments in September 2011. Taking into account comments received from various stakeholders, the guidelines have now been finalised and are enclosed in Annex. These guidelines also cover prudential treatment of transfer of assets through direct assignment of cash flows and the underlying securities, if any. 2. The guidelines are organised in three Sections. Section A contains the provisions relating to securitisation of assets. A separate circular would be issued in due course on reset of credit enhancements in case of securitisation transactions. Section B contains stipulations regarding transfer of standard assets through direct assignment of cash flows. Section C enumerates the securitisation transactions which are currently not permissible in India. 3. All other guidelines on securitisation of assets including those contained in our ‘Master Circular on New Capital Adequacy Framework’ dated July 1, 2011 remain unchanged. Yours faithfully, (Deepak Singhal) Encl.: as above Extract from Monetary Policy Statement 2012-13 Lock-in Period and Minimum Retention for Securitisation Exposures 107. With a view to developing an orderly and healthy securitisation market and ensuring greater alignment of the interests of the originators and the investors, it was considered necessary to prescribe a minimum lock-in-period and minimum retention criteria for securitised loans originated and purchased by banks and NBFCs. Accordingly, a discussion paper and draft guidelines on securitisation transactions were issued in April 2010 for public comments. After considering the feedback received and international developments during the intervening period, revised draft guidelines were issued for public comments in September 2011. Taking into account comments received from various stakeholders, it is proposed:
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