RBI's Acharya moots US-style trading platform for distressed assets

The RBI deputy governor said stakeholders should at least discuss whether there was value to building something like this as the US had built the LSTA over a period of time

Reserve Bank of India (RBI) Deputy Governor Viral Acharya today suggested setting up of a online trading platform for selling distressed assets to ensure transparency and better price discovery.

Indian Banks’ Association (IBA), Association of Asset Reconstruction Companies (ARCON) and credit rating agencies (CRAs) can join hands to establish the equivalent of the US Loan Syndication and Trading Association (LSTA)  for this purpose, Acharya said at an ASSOCHAM event on asset reconstruction in Mumbai.

Such an arrangement would provide disclosure on credit events, digitisation of loans and legal documents and standardisation along the way. Besides, it also provides online bidding