INSUBCONTINENT EXCLUSIVE:
bank on Tuesday recommended a slew of measures for developing a secondary market for corporate loans, including easing of regulations to
allow foreign portfolio investors (FPIs) to directly purchase distressed loans from banks.These moves are aimed at developing credit markets
and come at a time when the country is facing a liquidity crisis among its shadow banks after the collapse of IL-FS, one of the biggest
shadow banks, last year.FPIs, who so far were allowed to invest in stressed assets through asset reconstruction companies (ARCs), can
directly participate in the bad loan market within an annual limit set by the Reserve Bank of India (RBI) in consultation with the
government, the task force recommended.RBI's task force also recommended easing rules around the securitisation of loan assets and
permitting wider participation from funds and insurance companies in trading these securities, the central bank said.It also proposed
setting up a self-regulatory body to standardize loan documents and promote transparency in the secondary market.RBI has posted the
recommendations on its website for comments from stakeholders and they are subject to the central bank's approval.The task force was
formed in May to review the existing state of the market for loans in India and to make recommendations for the development of a secondary
market for corporate loans.Get Breaking news, live coverage, and Latest News from India and around the world on TheIndianSubcontinent.com
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