Hurdles in implementation of securitization, Financial Management

The following are considered the major stumbling blocks:

  1. The process becomes expensive because of the stamp duty payable.

  1. It also attracts the provisions of the Registration Act.

  1. One interpretation of the Transfer of Property Act has been that assignment of a debt has to be in whole and not in part. Besides, the Sale of Goods Act supports the view that only a property in existence is capable of being transferred. Therefore, securitization of future receivables is not covered.

  1. Certain provisions of the Income Tax law inhibit the process.

  1. A more efficient foreclosure law is needed. Along with changes in the legal environment, regulatory issues too have to be addressed. The latter understandably have not evolved in India - even in the developed countries the concept is new. The different institutions that will participate and the several stages in a typical transaction will come under different regulatory ambit. A formal and harmonious regulatory framework for securitization is, therefore, needed. Also, the investor base needs to be both strengthened and widened. Recently, the Securities and Exchange Board of India permitted mutual funds to trade in securitized debt. There is a strong case for persuading foreign institutional investors to invest in the market. Like the rest of the debt market, the one dealing in securitized instruments needs to be transparent and technologically up-to-date.

Posted Date: 9/8/2012 7:48:36 AM | Location : United States







Related Discussions:- Hurdles in implementation of securitization, Assignment Help, Ask Question on Hurdles in implementation of securitization, Get Answer, Expert's Help, Hurdles in implementation of securitization Discussions

Write discussion on Hurdles in implementation of securitization
Your posts are moderated
Related Questions
What is trustworthy collateral from the lenders' perspective?  Explain whether accounts receivable and inventory are trustworthy collateral. Assets which are readily marketable

Call provision is the right of the issuer to call back and retire the issued bonds before the maturity date. The issuer may call the bond and retire the bond by paying

Rating denote an issuer's ability to respond to adverse changes in circumstances and economic conditions. The rating scale is generally differentiated into variou

Info on applying CVP to product mix limiting factors

Q. Cost of Equity Share Capital? Cost of Equity Share Capital: - The cost of equity is the utmost rate of return that the company should earn on equity financed position of its

Types of Government Stocks Issue of Stock through AuctionThe RBI, on behalf of the government, issues notification to auction government securities, stating the amount and time

what are the types of non-statuary reports?

Internal Rate of Retur n The discount rate at which the net current value (the value of all future cash flows, in excess of the real investment, expressed  in today's d

Operating Leverage Operating leverage define the degree to which an organization cost of operation is fixed as opposed to variable. Therefore, it is a measure of how much a fir