securitization

CASE STUDY The impact of Securitisation in the books of originator and SPV can be explained with the help of the following example. The Originator ‘X’ bank has issued home loans worth Rs. 100 Lac with an effective finance charge of 16.5% p.a and average maturity of seven years. The home...

SYSTEMIC RISKS OF SECURITIZATION 1. Capital Adequacy Related Risks The present stand alone capital adequacy rules are relatively crude for as for certain types of loans the adequacy requirements are largely than the risk they would justify. Securitization of such loans will not create any...

ACCOUNTING ISSUE IN SECURITIZATION Accounting is a crucial issue in securitization, since one of the prime motivations in securitization is to put assets off the balance sheet. Accounting for securitization is not merely a matter of presentation: it reflects on the cost, and therefore, the...

TAX ISSUES IN SECURITIZATION The basic objective of an ideal tax regime for securitization should be based on the nature of the securitization vehicle. If the vehicle is merely a passive conduit between the investors and the originator, the conduit should be taxed neutral or tax transparent...

IMPACT OF SECURITIZATION ON BANKING It says securitisation is slowly but definitely changing the face of modern banking and by the turn of the new millennium, securitisation would have transformed banking into a new-look function. Banks are increasingly facing the threat of...

CRITICAL ANALYSIS OF THE SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST LAW  It is a welcome piece of legislation that will have significant positive implications not only for the banking and financial services sector, but for the economy as a...

NEED FOR SECURITIZATION IN INDIA The resource crunch the Indian economy is facing today for large-scale infrastructure investment is stupendous. Infrastructure needs to grow at least at 25% annual rate in the next few years to sustain 7-8% long-term growth of the Indian economy. Securitization...

REVOLVING ASSETS SECURITIZATION This is a method of providing the investors with a relatively predictable repayment schedule, even though the underlying assets are non-amortizing. After a predetermined revolving period during which only interest payments are made, these securities call for...

FUTURE FLOW SECURITIZATION Under Future flow securitization the assets being transferred by the originators is not an existing claim against existing obligors, but a future claim against future obligors. Examples can be export receivables, future royalty etc.

Asset Securitization It can involve of three types of securitization 1. Asset Backed Securitization 2. Mortgage Backed Securitization 3. Infrastructure Backed Securitization These are classified into the above three classes depending upon the kind of receivables it backs. Asset Backed is...

WHEN CAN SECURITIZATION OCCUR? When the originator expects to benefit by way of cost reduction or higher returns, by securitizing, they initiate the process. If the value of the new securities exceeds the value of the underlying assets, securitization would be beneficial. The Cost Factors...

INTRODUCTION Securitization is the process of pooling and packaging financial assets, usually relatively illiquid, into liquid marketable securities. Securitization allows an entity to assign (i.e. sell) its interest in a pool of financial assets (and the underlying security) to other...

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Distinct features of securitization in India!!!!!!!!!!!!!!!!!