look news india
New Delhi: Banks are facing challenges in raising funds amid strong demand for loans. In such a situation, they are resorting to securitization to improve the cash position. Rating agency ICRA said that in the July-September quarter, securitization and direct assignment deals worth Rs 45,000 crore and Rs 50,000 crore have been estimated.
HDFC Bank, the country's largest private sector bank, has raised cash worth Rs 9,062 crore through three separate pass-through certificate deals with maturity periods ranging from 2 to 6 years. The new car loans will be backed by guarantees worth Rs 9,062 crore. One of the biggest deals in recent times, the deal will help the lender address its credit-deposit rate problem, which has crossed 100 per cent since its merger with HDFC Ltd last year.
According to data compiled by Crisil, FY24 saw securitisation worth Rs. 10,000 crore, with most deals being done by small finance banks. During the first quarter of this fiscal year (Q1 FY25), deals worth Rs. 8,500 crore were done, with most of the deals being large private sector deals.
Total securitisation volume including non-banking financial companies in the first quarter was Rs. 45,000 crore, a growth of 17 per cent on a like-for-like basis compared to the same period last year.
The growth in bank deposits has consistently lagged behind the growth in loans. In such a situation, banks are trying additional measures to raise funds. Securitization can be a better means of raising funds for banks.
Rating agencies expect securitisation to pick up during the last fortnight of the quarter. Dufaria said, 'There are still 10 days left in this month and most of the volume is expected to come in this period. The real picture will emerge in the first week of October 2024.