RBI Sets the Stage for Listed Residential Mortgage-Backed Securities


The Reserve Bank of India proposes to set differential guidelines for residential mortgage-backed securities and set the stage for their listing. That’s according to a new draft framework for ‘Standard Asset Securitization’ issued on Monday.

After deliberations and recommendations from a Committee and Working Group last year, the RBI has submitted a new draft of the framework, requesting suggestions until June 30.

The key changes include a revised definition of securitization, which excludes “direct assignment” loan sales. “Only transactions that result in the issuance of multiple tranches of securities that reflect different credit risks will be treated as securitization transactions,” the draft says. “The definition of securitization has been changed to allow single asset securitizations. The securitization of exposures purchased from other lenders has been allowed. “

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