Banking Industry and the Issue of NPAs NPA Management Need for Asset Reconstruction Companies Global Scenario Interaction with Banks' Executives    Introduction to Securitisation: The Framework Global Securitisation Market Securitisation in india SARFAESI ACT 2002: An Assessment Impact of Basel II on Securitisation PREFACE | FOREWORD | EXECUTIVE SUMMARY | SECURITISATION - AN OVERVIEW | THE INDIAN BANKING INDUSTRY AND NPA's NPA MANAGEMENT AND ARC's| THE BANKING PERSPECTIVE| COMPANY LISTING & PROFILES| LAUNCH EVENT| SPONSORS Alphabetical Listing Total Advances Net NPAs Amount Net NPA Advances Ratio Profiles

Dun & Bradstreet India (D&B India) has been working closely with banks and other financial institutions on various aspects of financial markets such as risk management, accounting policies, industry research among others. Over the last few years non-performing assets have emerged as a major concern for the Indian financial system. The publication ‘Securitisation in India: The story so far and the way forward’, was conceptualised in association with the Asset Reconstruction Company (India) Limited (Arcil) with a vision to track the Indian securitisation and asset reconstruction market on continual basis. ‘Securitisation in India: The story so far and the way forward’ is an attempt to nurture and spread knowledge among the financial fraternity about the role, process and implications of securitisation in the financial arena. The publication contains profiles of leading asset reconstruction companies and an update on the Indian securitisation and asset reconstruction market along with country comparisons. It also includes interviews of 11 top bankers expressing their opinion on the industry. Further a section titled “The Banking Perspective” presents gist of the views expressed by the banking industry.

Key insights that emerged from The Banking Perspective include

• Domain expertise and special empowerment of ARCs enable ARCs to understand and find the way out through the complexity of the system, rendering them more efficient in NPA recovery compared to banks.
  
  
• Banks having capabilities and skills related to NPA recovery can enter the segment of NPA management by establishing dedicated units at par with ARC.
  
  
• Inability to inject funds for restructuring of the defaulting business units, if warranted, emerged as the major shortcoming of ARCs compared to banks.
  
  
• The existing guidelines of RBI for sale of assets to ARC are conservative and do not permit banks to book profits arising out of sale of loans in case of SRs. This came forth as a major hindrance for banks going for NPA recovery through the ARC route.
  
  
• Banks prefer a clean exit over the security receipts option as the former provides instant liquidity by removing bad assets from the balance sheet and also releases capital. Moreover, security receipts have longer and uncertain repayment periods.

D&B India is confident that ‘Securitisation in India: The story so far and the way forward’ will provide appropriate guidance to banks and financial institutions for developing securitisation and asset reconstruction market in the long term.

The Indian banking sector is poised for healthy growth in the forthcoming years. Though currently the domestic asset reconstruction market is in the nascent stage, it is poised to leap frog in coming years. D&B India and Arcil are committed towards development of this market and would continue to present the latest trends in its future editions.

Kaushal Sampat
Chief Operating Officer
Dun & Bradstreet India