GK
BANKING AWARENESS AND SEBI
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
What is the objective of securitisation of financial assets?
|
|
to enable the banks in speedy recovery of bad loans
|
|
|
recycling of funds and reduce concentration risk
|
|
|
to acquire assets and then sell the same at profit
|
|
|
to sell the securities without intervention of the court, only if loan goes bad
|
Explanation:
Detailed explanation-1: -Securitization provides creditors with a mechanism to lower their associated risk through the division of ownership of the debt obligations. But that doesn’t help much if the loan holders’ default and little can be realized through the sale of their assets.
Detailed explanation-2: -Objectives of SARFAESI Act, 2002 Efficient or rapid recovery of non-performing assets (NPAs) of the banks and FIs. Allows banks and financial institutions to auction properties (say, commercial/residential) when the borrower fails to repay their loans.
There is 1 question to complete.