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Securitisation of NPAs - Merging Financial Laws and Regulations


Affiliations
1 Panjab University, Punjab, India
2 High Court of Punjab and Haryana, Chandigarh, India
     

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The Indian legal, banking and financial sector, has evolved considerably in terms of regulation and diversity of financial solutions, technological sophistication etc. Where on one hand the Indian courts are ardently making precedents and encouraging a just and speedy disposal mechanism for the financial matters, with an eye towards borrower (debtor) protection, our financial regulators are making endeavors to stimulate and supervise the banking institutions (creditors).

The present paper evaluates the evolving legal practices of the Indian Courts in relation to Securitisation of assets and analyses the RBI Prudential norms laying down the procedure for the sale of financial assets (non-performing assets (NPAs)) by the banks and financial institutions to Securitisation Company (SC)/ Reconstruction Company (RC) (created under the SARFAESI Act).

The aim of this research is to illustrate that in the Indian context Securitisation has proved specifically advantageous in rectifying the problem of burgeoning NPAs. The paper concludes with the finding that such healthy interdependence and interplay between law and regulation will eventually pave way for uplifting the Indian economy and provide it a level playing field vis-à-vis other financial jurisdictions of the world.


Keywords

Securitisation of NPAs, Mitigating Financial Risks, Securitization Process, Non-performing Loans, SARFAESI Act
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  • Securitisation of NPAs - Merging Financial Laws and Regulations

Abstract Views: 482  |  PDF Views: 6

Authors

Sheveta Aggarwal Bhatia
Panjab University, Punjab, India
Shaibya Sood
High Court of Punjab and Haryana, Chandigarh, India

Abstract


The Indian legal, banking and financial sector, has evolved considerably in terms of regulation and diversity of financial solutions, technological sophistication etc. Where on one hand the Indian courts are ardently making precedents and encouraging a just and speedy disposal mechanism for the financial matters, with an eye towards borrower (debtor) protection, our financial regulators are making endeavors to stimulate and supervise the banking institutions (creditors).

The present paper evaluates the evolving legal practices of the Indian Courts in relation to Securitisation of assets and analyses the RBI Prudential norms laying down the procedure for the sale of financial assets (non-performing assets (NPAs)) by the banks and financial institutions to Securitisation Company (SC)/ Reconstruction Company (RC) (created under the SARFAESI Act).

The aim of this research is to illustrate that in the Indian context Securitisation has proved specifically advantageous in rectifying the problem of burgeoning NPAs. The paper concludes with the finding that such healthy interdependence and interplay between law and regulation will eventually pave way for uplifting the Indian economy and provide it a level playing field vis-à-vis other financial jurisdictions of the world.


Keywords


Securitisation of NPAs, Mitigating Financial Risks, Securitization Process, Non-performing Loans, SARFAESI Act