Critical Success Factors in Asset Securitisation in Indian Banks

Gopalan Ramachandran (), Srinivas Gumparthi and Tariq Aziz
Additional contact information
Gopalan Ramachandran: Novature Tech Pvt Ltd.
Srinivas Gumparthi: SSN School of Management
Tariq Aziz: Aligarh Muslim University

A chapter in Proceedings of the International Conference on Emerging Trends in Business & Management (ICETBM 2023), 2023, pp 221-231 from Springer

Abstract: Abstract Asset securitization is the structured business process whereby Banks’ loan assets and other receivables are packaged and sold in the form of ‘as-set-backed securities’ (ABS), thereby loan originators transfer some of their loan-risks to third parties. Asset securitization considers a pool of performing/non-performing retail loan assets and through financial engineering models, transforms them to tradable security by involving a Special Purpose Vehicle (SPV) that issues Negotiable Instruments (like Bonds/Promissory Notes/CPs) called Pass Through Certificates (PTCs) to Investors. In Indian context, most asset securitization deals are done on Direct Assignment (DA) basis through retail loans-asset pool transfer to pool-buyer Bank with no SPV in between and hence no tradable security. This Research study analysed ‘Critical Success Factors (CSFs)’ in Indian model of asset securitisation and in the process also analysed its associated business-processes, systematic-risks, Issues & challenges. This study sourced its primary data from hands-on deal-practitioners and Subject Matter Experts (SMEs) associated with deal-participating entities and through qualitative data analysis technique of Narrative analysis and Applied Conversation analysis, the research-findings are concluded. Towards future prospects and challenges, this study suggests for setting up ‘Centre of Excellence (CoE) for Assets Securitisation’ in each bank, for ‘building product-expertise and evolve appropriate asset-pricing-models for deals and PTC securities. The study also suggests for an ‘Enabling IT systems’ that support automated deal-processes, risk-monitoring and compliance tracking’. These two aspects would facilitate for better deal-transparency and for making informed decisions by deal stakeholders.

Keywords: Asset Securitisation; Bank; Systematic Risks; Direct Assignment (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-162-3_20

Ordering information: This item can be ordered from
http://www.springer.com/9789464631623

DOI: 10.2991/978-94-6463-162-3_20

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().