Trend in structured Finance (securitisation) in select categories
Category 2006 2007 2008 2009 2010
Asset backed securities 17850 23420 31320 13580 20970
loan sale-offs 2100 11900 31820 36440 14580
Total issuances 24960 36930 63730 54470 42590
Per cent growth (%) 48 73 -15 -22
Figures in Rs crore at end of March Source: Icra estimates
The above data is from ICRA estimates appeared in an article in The Business Standard of April 27, 2010 (http://www.business-standard.com/india/news/securitisation-market-slips-again-in-fy10/393090/&com=y). Securitisation is a product in use in Indian markets for at least twenty years but has not been very popular. May be due to lack of awareness among finance professionals and decision makers in the commercial banks or guidelines from the regulators. The growth trend in 2006-07-08 has become negative in last two years 2008-09-10 presumably attributed to the global meltdown.
May be the bankers and other players have become extra cautious during the recessionary period. But, thanks to the conservative or cautious approach of the Indian Banking system, the meltdown has not affected them so severely as compared to their USA counterparts. More than 100 commercial banks in US have either closed down or bailed out whereas nothing of that sort happened in India. Indian banking system has been sound and robust. Deposit and Credit growth has been on the normal trends in India.