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
Policy Conflicts in Debt and Monetary Management: Co-ordination of operations is important so as to avoid differences in the policies of cash and debt management of the governm

A pharmaceutical company, named "XYZ", plans to deliver trials to three different clinics (C1, C2, and C3). The trials are used for the emergency treatments so XYZ must fulfill all

What are the Predator shareholders Predator company's shareholders mayn't approve the bid for various reasons. Reduction in EPS If consideration is

(a) Find the nominal rate of interest j compounded quarterly which is equivalent to a 5% e ective rate of interest. (b) Which one will deliver a higher future value on a deposit

Differences between IAS 14 and IFRS 8 IFRS 8 requires identification of operating segments based on internal reports which are regularly reviewed by management for decision

Create contingency plans for the following scenarios: • One of your highly qualified consultants has given three months notice and is planning to move to a competitor after this ti

How are foreign exchange transactions between international banks settled? Answer:  a network of correspondent banking relationships is known as the interbank market with large c

Plugging back of the future of profit means the reinvestment by the concerns of its surplus in the business. it is an internal financial of the business and it is more suitable for

Tactics can be used by company to protect itself. Before the bid Types of Shareholder Having the right shareholders on board who can be

how does "x" company hegde itself? the company name will be shared later.