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Securitisation of asset means, a business concern or financial institution can transform its assets into more liquid and marketable instruments.Securitisation is an additional source of funds for the originator as it converts an otherwise illiquid asset into ready liquidity, reducing dependence on capital. Further, it reduces funding costs, compared both to capital as also fund raising instruments like bonds, debentures and CPs. This also fulfils a very fundamental objective of the regulatory authorities from the viewpoint of capital utilisation, " preventing the build-up of capital where it is not needed". ICICI was the first to securitise some of their assetes. |
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