Retail loan securitisations jump 56% to Rs 1.76 lakh crore in FY23: Care Ratings

Care Ratings in its latest report has said that retail loan securitisations jumped a robust 56 per cent to Rs 1.76 lakh crore in the just concluded fiscal 2023, while that of wholesale rose to around Rs 6,600 crore, coming out of the pandemic blues finally.

The agency said the secondary market for standard retail assets has seen a robust growth of 56 per cent in FY23, reflecting the resilient retail asset pools in the secondary market as well as the preference of banks to grow their retail assets to meet priority sector lending (PSL) requirements. It stated that such robust growth was possible as bank lending to NBFCs grew 32 per cent and there is a positive correlation between interest rate and relative premium for PSL assets. Both these factors augur well for securitisation market.

The report further said the total volume, including direct assignment transactions, rose to Rs 176,000 crore from around Rs 1,13,000 crore in FY22, led by direct assignments which constituted around 61 per cent of the total securitisation market with pass-through certificates (PTCs) making up the remaining volume. The credit quality of retail assets remained resilient, and the total credit growth of banks increased by just over 15 per cent, while bank credit to NBFCs grew by more than twice that rate