Loan sale-down activity by banks, NBFCs shrinks by 7% in FY18

Priority sector loan paper trading grows threefold

Loan sell-down activity, comprising securitisation and direct assignment, by banks and finance companies in India shrunk 7 per cent to Rs 830 billion in 2017-18, from Rs 900 billion in 2016-17, according to rating agency Icra.

Securitisation is pooling of contractual debt like home and automobile loans and credit card receivables, then selling their related cash flows to third-party investors as securities-like bonds. This was affected by a rise in trading into priority sector lending certificates (PSLCs) and uncertainty over applicability of the goods and services tax.

Pass-through certificate (PTC) volumes fell 24 per cent to Rs 348 billion in