RBI revamps loan transfer and securitisation rules

These are part of the sweeping changes the regulator announced in the loan transfer as well as securitization rules in order to improve governance. The regular has mandated banks to follow a board-approved policy for the same.
The Reserve Bank of India (RBI) has revamped loan transfer and securitization rules that are expected to boost liquidity in the system further and improve transparency and corporate governance.RBI allowed lenders to transfer their loan exposures classified as fraud to asset reconstruction companies (ARCs). It stressed disclosures and told lenders to include the financial impact of any transfer into their profit and loss account for the period when the transfer is completed.