Wednesday, June 16

RBI’s relaxation in securitisation guideline may release Rs 60,000 crore

The Reserve Bank of India’s recent relaxation in securitisation guideline is likely to release Rs 60,000 crore of portfolio available for securitisation, industry estimate shows. RBI has reduced the holding period from 12 months to 6 months for loans having original maturity of 5 years and more. The move is likely to benefit housing finance companies and non-banking finance companies engaged in loan against property and home loans where the loan tenor is more than 5 years.

“Just because of RBI’s relaxation, around Rs 60,000 crore portfolio would be extra window for additional securitisation,” said Karthik Srinivasan Icra. “HFCs will continue to sell retail home loan portfolios.”

Following the IL&FS crisis, liquidity in the system had tightened leading to RBI announcing measures. This move by RBI will increase the eligible assets for most HFCs, more so for those who have witnessed strong growth in the past 12 months. A part of their loan book would now become eligible for securitisation and these entities can raise more funds through the securitisation route, which will provide them with additional liquidity.

“This will only look to faster securitisation of pools and for small players it can be an impetus,” said Sanjaya Gupta MD and CEO PNB Housing Finance.

DHFL can securitize an additional Rs 6000 crore of loans over the next three months. Indiabulls Housing Finance can securitise Rs 25,000 crore between December and May. Similarly, PNB Housing Finance is looking to securitise Rs 4,000 crore portfolio in the second half of the financial year.

“It will lend more confidence to the banking system and encourage banks to buy more portfolios and build their own retail book, something they have struggled to build,” said Sanjay Chamria Magma Fincorp. “NBFCs and banks and will lend more stability to the debt market, which is the need of the hour.”

NBFCs have been selling in October and November. “NBFCs are selling down their books and they will find it easier to sell and this will mostly help the higher rated HFCs,” said A&M partner Bhavik Hathi.

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