SECURITIZATION : A PROCESS OF REDUCING N.P.A.

Securitization is a process of pooling and repacking of homogenous illiquid financial assets into marketable securities that can be sold to investor. Basically securitization is process of raising fund by selling of receivable for many. Here financial assets means loan backed by properties.

Steps in securitization process:

1.       Acquisition of financial assets by Securitization Company or assets Reconstruction Company.

2.       Securitization Company or assets Reconstruction Company with the help of investment banker issues security receipts to investors.

3.       Securitization Company or Assets Reconstruction Company pays for acquisition of financial assets with the proceeds of securities receipts.