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New Rules for Securitisation of Standard Assets-- RBI

Published on September 28, 2021
Current Context: The Reserve Bank of India (RBI) has framed new rules for the Securitisation of Standard Assets.
New Rules for Securitisation of Standard Assets-- RBI
  • The new set of rules will be applicable to all scheduled commercial banks, excluding RRBs, all-India term financial institutions, SFBs, and NBFCs.
  • The RBI has specified Minimum Retention Requirement (MRR) for different asset classes under Master Direction RBI (Securitisation of Standard Assets) Directions, 2021.
  • For underlying loans with an original maturity of 24 months or less, the MRR will be 5% of the book value of the loans being securitised.
  • For underlying loans with an original maturity of more than 24 months as well as loans with bullet repayments, the MRR shall be 10% of the book value of the loans being securitised.
  • And for residential mortgage-backed securities, the MRR for the originator will be 5% of the book value of the loans being securitised, irrespective of the original maturity.
  • The minimum ticket size for the issuance of securitisation notes will be Rs 1 crore.

Question: 

Q.1 As per the RBI’s new rules for Securitisation of Standard Assets, the minimum ticket size for issuance of securitisation notes will be ___?
a. Rs 1 crore
b. Rs 1.5 crore
c. Rs 50 lakhs
d. Rs 75 lakhs

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