Login With Google
Norms for sale of loans:
News:
- The Reserve Bank of India (RBI) has proposed a comprehensive set of norms for sale of loans by banks which could be either standard or sub-standard.
More in the news:
- Aim: Building a robust secondary market for bank loans that could ensure proper price discovery and can be used as an indicator for impending stress.
- At present, the guidelines for sale of loan exposures, both standard as well as stressed exposures, are spread across various circulars of the RBI.
- A dynamic secondary market for bank loans will also ensure proper discovery of credit risk pricing associated with each exposure.
- Applicability: These guidelines will be applicable to commercial banks, all financial institutions, non-banking finance companies and small finance banks.
- The directions will be applicable to all loan sales, including sale of loans to special purpose entities for the purpose of securitization.
- The stressed assets would be allowed to be sold only through assignment or novation.