RBI/2011-12
DBOD.No.BP. / /21.04.177/2011-12

September 27, 2011

The Chairman and Managing Director /
Chief Executive Officers of
All Scheduled Commercial Banks
(Excluding RRBs and Local Area Banks) and
All-India Term Lending and Refinancing Institutions
(Exim Bank, NABARD, NHB and SIDBI)

Dear Sir,

Revisions to the Guidelines on Securitisation Transactions

Please refer to paragraph 161 of the Second Quarter Review of the Monetary Policy for the year 2009-10 announced on October 27, 2009 (copy of the paragraphs enclosed), and the Draft Guidelines on Securitisation Transactions and a Discussion Paper on the subject, issued subsequently on April 19, 2010. The Draft Guidelines proposed to stipulate minimum retention requirement (MRR) and minimum holding period (MHP) for securitisation transactions. The Draft Guidelines have been reviewed taking into account the feedback received and further international developments on the subject during the intervening period. The revised guidelines are furnished 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. 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 contained in our Master Circular on New Capital Adequacy Framework dated July 1, 2011 including that in Annex 7 of the circular remain unchanged.

Yours faithfully,

(Deepak Singhal)
Chief General Manager-in-Charge