Revised RBI guidelines on securitisation likely to impact short-term loans

But they are unlikely to disrupt the securitisation market as such loans constituted only 5% of the total securitisation volume in H1FY23

The Reserve Bank of India’s (RBI) revised guidelines on securitisation are likely to have an impact on personal, consumer and other short-term loans, said rating agency Icra. Overall, the new norms are unlikely to disrupt the securitisation market as these short-tenured loans constituted only 5 per cent of the total securitisation volume in H1FY23.

Under the personal loan category, the ‘buy now, pay later’ kind disbursed by fintechs/digital lenders are typically for a tenure of up to 12 months and hence will now be ineligible for securitisation, the rating agency said in its note. 

Gold loan lenders will also see