Task force recommends online loan sale platform

Central loan contract registry mooted

September 03, 2019 10:35 pm | Updated 10:53 pm IST - Mumbai

The task force set up for the development of a secondary market for corporate loans has recommended an online loan sales platform to conduct auctions.

Headed by T. N. Manoharan, chairman, Canara Bank, the task force also said that a self-regulatory body of participants should be formed to finalise detailed modalities for the secondary market for corporate loans, including standardisation of documentation.

Retarding factors

The committee noted that the secondary market for loans, in general, had not evolved to the scale of its potential and factors that had impeded development of this market were absence of a systematic loan sales platform, lack of standardisation in documentation and legal factors.

It has also recommended setting up a central loan contract registry.

Amendment of the regulations with respect to securitisation and assignment of loans, asset reconstruction, foreign portfolio investment and external commercial borrowings were also recommended.

The committee also said that amendments in regulations issued by SEBI, IRDA and PFRDA were needed to enable participation of non-banking entities such as mutual funds, insurance companies and pension funds.

Comments have been invited on the report by September 30.

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