How will GIFT City promote securitization?
The govt wants to enhance the participation of FPIs in securitization transactions
In India, asset securitization—a process where assets like home loans (mortgage-backed securities, or MBS), auto/microfinance loans and credit card debt (asset-backed securities, or ABS), etc., are pooled and repackaged as interest-bearing securities —is comparatively new. The pooled assets are sold to investors either in the form of pass-through certificates (PTCs), which are like bonds, for standard assets, or security receipts (SRs) for stressed assets. PTCs/SRs represent claims on incoming cash flows (principal repayments and interest) from such pooled assets.