Categories: Banking

RBI fixes minimum ticket size to issue securitisation notes

The Reserve Bank of India has issued guidelines regarding the Securitisation of Standard Assets. As per the guidelines, the minimum ticket size for the issuance of securitization notes will be Rs. 1 crore. Securitisation involves transactions where credit risk in assets are redistributed by repackaging them into tradeable securities with different risk profiles which may give investors of various classes access to exposures which they otherwise might be unable to access directly. It means securities issued by the special purpose entity as a part of a securitization.

Buy Prime Test Series for all Banking, SSC, Insurance & other exams

About Minimum Retention Requirement (MRR)

  • For underlying loans with an original maturity of 24 months or less, the MRR shall be 5% of the book value of the loans being securitised.
  • For underlying loans with an original maturity of more than 24 months as well as loans with bullet repayments, the MRR shall be 10% of the book value of the loans being securitised.
  • In the case of residential mortgage-backed securities, the MRR for the originator shall be 5% of the book value of the loans being securitised, irrespective of the original maturity.

Find More Banking News Here

Sumit Arora

Recent Posts

Uttarakhand Tourism Announced India’s First Astro Tourism Campaign Named ‘Nakshatra Sabha’

The Uttarakhand Tourism Development Board has teamed up with Starscapes, an astro-tourism company, to introduce…

7 hours ago

UNESCO Guillermo Cano Prize 2024 Awarded to Palestine Journalists in Gaza

In a gesture of solidarity and recognition, Palestinian journalists covering the crisis in Gaza have…

9 hours ago

Sanjaya Kumar Mishra to head GST Appellate Tribunal

Retired Justice Sanjaya Kumar Mishra has been appointed as the President of the Goods &…

11 hours ago

RBI Approves Re-appointment of Atanu Chakraborty as HDFC Bank Part-Time Chairman

Atanu Chakraborty's re-appointment as part-time Chairman of HDFC Bank for three years, effective from May…

11 hours ago

American Express Announces Inauguration of 1 Million Sq Ft Campus in Gurugram

American Express is set to inaugurate its expansive new campus in Gurugram, spanning nearly one…

11 hours ago

World Press Freedom Index 2024 Announced, India Ranked 159th Out of 180 Countries

In the latest edition of the World Press Freedom Index published annually by Reporters Without…

11 hours ago