Securitization increased by 60% to Rs 55,000 crore in June quarter, know the new report of rating agency Crisil

Mumbai: Strong loan collections and higher loan growth at the level of non-banking financial companies (NBFCs) led to a 60 per cent increase in the size of repo materialisation to Rs 55,000 crore in the first quarter of the current fiscal. This information was given in a report on Monday. According to the report of rating agency Crisil, this figure of securitization in the April-June quarter of FY 2023-24 is the highest ever quarterly level. The report attributes this to the growing trend of banks and NBFCs looking at securitization as a means of funding.

Under securitization, one financier or lender transfers to another financier the future amount received on a loan or a group of loans. This helps them meet their immediate liquidity needs. Securitization related transactions increased to over 250 in the first quarter of the current financial year from 160 a year ago. Apart from private and public sector banks, foreign banks dominated in these.

Krishnan Sitharaman, Senior Director and Chief Rating Officer, Crisil said, “Banks are getting two benefits from securitization. They are maintaining credit growth without any direct impact on their credit limits and at the same time diversifying their exposure to retail loans. He expressed confidence that the size of securitization in this financial year would surpass last year’s figure of Rs 1.9 lakh crore.