Ratings agency Crisil today said there is an uptick in debt securitisation by gold-loan companies in the market,which has stabilised after the initial shocks after the new norms were introduced by the central bank in May. The number of gold loan originators accessing the securitisation market has increased to 25 from 21 in the previous year,it said. The report also said the securitisation market is adjusting well to the revised securitisation guidelines issued by the Reserve Bank in May. The agency's senior director Pawan Agrawal said there is a structural shift towards the PTC (pass through certificate) route since the onset of new guidelines. "The revised guidelines inhibit credit enhancement in direct assignments,thereby diminishing the attractiveness of the scheme,leading to a shift to the PTC route," the report said. Between May and October,38 transactions worth Rs 3,400 crore were executed as against Rs 3,500 crore through an equal number of deals in the same period last year. Transactions through the PTC route accounted for more than 85 per cent of the total issuances since the guidelines were issued,it added. Going ahead,Agrawal said the recovery in the numbers can be sustained if certain issues are addressed. "Clarity on the income-tax liability of the trust set up for the PTC route will enhance confidence of investors. In addition,the guidelines for resetting of credit enhancement will bring down the overall cost of securitisation for issuers,without necessarily reducing the protection for investors. Finally,active steps to enhance liquidity will attract long-term investors to the market," he said.
