RBI fixes minimum ticket size to issue securitisation notes

WHY IN THE NEWS?

• The Reserve Bank of India has issued guidelines regarding the Securitisation of Standard Assets. As per the guidelines, the minimum ticket size for the issuance of securitization notes will be Rs. 1 crore.
• Securitisation involves transactions where credit risk in assets are redistributed by repackaging them into tradeable securities with different risk profiles which may give investors of various classes access to exposures which they otherwise might be unable to access directly. It means securities issued by the special purpose entity as a part of a securitization.