Securitisation market makes a comeback

With interest rates softening and credit demand easing, banks have revived their interest in asset securitisation. According to sources, public sector banks (PSBs) are receiving offers from private banks keen to sell a part of their portfolio through the securitisation route.

Recently, Icra had rated about Rs 1,800-crore securitised paper of ICICI Bank, which had personal loans as its underlying asset. This is the largest pool of personal loan securitised by a bank in the Indian market.

“Most banks have booked loans at very good rates. Going forward, if rates soften or even if they remain stable, securitisation market will gain momentum,” said Prasad Koparkar, head of structured finance at Crisil. “Besides, yields on a ‘AAA’ securitised paper are 50-75 basis points higher compared with other ’AAA’ paper,” he added.

Read more in The Economic Times