A Study on Securitisation and Its Role in Indian Banking Industry

Finance is essential for smooth conduct of any business. However, a vacuum has developed between the demand and the consequent availability of finance which can be mitigated through securitisation. It consists of pooling of assets in the balance sheet of an originator, transferring it to special purpose vehicle and issuing securities to the investors. In India, since the first securitisation transaction was completed in 1991, the securitisation market in India has steadily grown and developed. This book makes a review of the theory underlying securitisation followed by a discussion on the present securitisation environment in India. An attempt has also been made to establish, empirically, whether the introduction of securitisation in Indian banking industry has a positive impact on the various performance indicators of selected institutions. Thereafter, a summarization of the global developments is presented and finally the discussion ends with an overall summarization. The analysis should help shed some light on the effects of securitisation in the Indian Banking Industry and should be especially useful to finance professionals, prospective investors and policy makers.