Volume : III, Issue : III, March - 2013

Securitization in India: A Strategic Tool for Competitiveness

Suman Chakraborty, Sabat Kumar Digal

Abstract :

Securitization is an American invention, but no longer remains an American curiosity. Almost every country’s financial systems have certain securitization schemes. Today, securitized assets not only include mortgages on properties, but also credit card receivables, computer leases, equipment notes financing, auto loans, and even future sales of music records. There was even an attempt to securitize the life insurance policies of people with full–blown AIDS, enabling them to monetize their policies. Securitization has emerged globally as an important technique for bundling assets and segregating risks into marketable securities. It involves parceling and selling pools of eligible assets by the company owning the assets to a Special Purpose Vehicle (SPV) company, which issues debt securities to finance the purchase of such assets. This paper will discuss the present nascent state of the securitization market in India, its potential and attempts to identify what needs to be done by various stakeholders in this market for securitization to grow into its full potential. The paper will attempt to explain the growth of securitization in different markets, elaborating on the process, reasons for securitizing assets, benefits of and requirements for a successful asset securitization focusing on India with special reference to SARFAESI Act 2002.

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Suman Chakraborty,Sabat Kumar Digal Securitization in India: A Strategic Tool for Competitiveness Indian Journal of Applied Research, Vol.III, Issue.III March 2013

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