Securitisation / assignment of loans where both interest and principal are due only at maturity are not allowed – as it is not possible to assess the repayment track record. BIS central bankers’ speeches  5  •  Credit enhancement is not allowed in case of assignment transactions – as the assignment deals are generally carried out among two financial institutions.
It is expected that the purchasing institution will do its own due diligence while acquiring assets rather than relying on credit enhancement. Indian Securitisation market and transaction volumes 21. The Indian market is still at a nascent stage driven as it is by the needs for meeting priority sector lending targets by banks.