The Reserve Bank of India has revised its rules for securitisation and sale of loans to help banks improve liquidity and rebalance exposures.

The revamp expands the types of assets that can be transferred and allows buyers other than asset reconstruction companies (ARCs) to acquire stressed assets. It also makes it mandatory for lenders to put in place a comprehensive board-approved policy for the sale of stressed assets.

The master directions – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021, and Reserve Bank of India (Securitisation of Standard Assets) Directions, 2021 – will be effective from 24 September 2021.

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