Securitisation guidelines on Thursday: RBI | india | Hindustan Times
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Securitisation guidelines on Thursday: RBI

Reserve Bank of India will issue guidelines on securitisation of standard assets on Thursday.

india Updated: Jan 31, 2006 15:54 IST
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Reserve Bank of India will issue guidelines on securitisation of standard assets on Thursday.

The draft guidelines were issued by the apex bank in April, 2005.

"The final guidelines on securitisation will be released on Thursday," RBI Deputy Governor V Leeladhar told reporters.

With regards to the penalty imposed last week on banks for breach of prudent banking practices and facilitating misuse of Initial Public Offer (IPO) finance to ineligible borrowers, he said the penalty is itself a loss of reputation for banks.

Indian banks are moving in right direction on meeting Basel II norms, he added.

RBI had imposed penalties on seven commercial banks including Bharat Overseas Bank Ltd, Citi Bank, HDFC Bank Ltd, ICICI Bank Ltd, Indian Overseas Bank, Standard Chartered Bank and Vijaya Bank on January 23, 2005.

Finance Minister P Chidambaram was reported to be "dissatisfied" with the amount fined by the RBI on the errant banks.

Replying to this, Leeladhar said depending upon the nature and gravity of the irregularities, the maximum amount of penatly had been imposed.

"A penalty imposed by the RBI is itself a reputaion loss for banks. It's because, the amount has to be disclosed by the bank on its balance sheet," Leeladhar said.

Asked whether Indian banks were moving in the right direction to meet the Basel-II deadline, he said the apex bank had set up a steering committee which every, now and then look into the progress made.

"I am sure we are in the right line and meet the deadline," Leeladhar said.