The difficulties faced by some of the non-banking finance companies (NBFCs) from avenues such as commercial paper have led to a buoyancy in the country’s securitisation market. Securitisation is the process where a lender sells its receivables from a loan or a pile or loans such as auto, home or credit cards. The credit rating agency added that the domestic securitisation market is witnessing another good year in terms of issuance volumes as NBFCs and HFCs continue to rely heavily on this route for raising funds and managing liquidity and asset liability (ALM) mismatch. Last month, the cabinet had approved the “partial credit guarantee scheme” for purchase of high-rated pooled assets from financially-sound NBFCs and HFCs. The PTC transaction volumes were around Rs 64,000 crore in the first nine months of this fiscal compared with around Rs 71,000 crore for 2018-19.

Source: The Telegraph January 26, 2020 19:18 UTC