CURRENT AFFAIRS

Detailed explanation-1: -The Reserve Bank of India released a discussion paper on the securitisation of stressed assets framework as a way to improve the quality of the sale and resolution of such accounts. The regulator’s proposal comes on the heels of an announcement it made in September 2022.

Detailed explanation-2: -Securitisation of Stressed Assets is a financial structure whereby an originator of NPAs sells these to a SPE that funds such an acquisition by issuing securitisation notes, per the paper.

Detailed explanation-3: -RBI issued a master direction on transferring loan exposures and securitising standard assets. The directions came after RBI considered public comments on the draft rules, which were issued on June 8, 2020. The objective is to transform the opaque and complex securitisation structures to promote financial stability.

Detailed explanation-4: -Stressed assets are defined as financial assets that have fallen behind on debt payments or are in danger of defaulting. This term is commonly used in the context of banking and finance, where they refer to non-performing loans (NPLs) and non-performing assets (NPAs).