Last week, CRISIL Ratings said that securitisation volumes rose to 45,000 crore in Q1 FY24, up 17 per cent year-on-year (Y-o-Y); over 95 originators tapped this route, compared to 80 in FY23. Of this lot, the majority were non-banking financial companies (NBFCs) seeking to diversify funding sources. This follows the Reserve Bank of India (RBI) increasing risk weights on credit exposures to NBFCs.
But what went largely unnoticed was that banks were also more active in this market: Their transaction volumes reached ₹8,500 crore in this period compared to 10,000 crore in for the whole of FY23. Ajit Velonie, senior director at CRISIL Ratings, cites the high credit-deposit (CD) ratios (that is, credit outpacing deposit growth) to "private banks looking at alternative sources of funding with bank originations now accounting for around a fifth of the overall securitisation volumes."
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