Rajiv Sabharwal, head of retail assets at ICICI Bank confirmed that ICICI Bank had recently done a deal with Arcil that involved a sale transaction to see bad home loans to Arcil. “We did this in the last quarter,” Sabharwal said.But what is interesting also, is:Sources said ICICI had offloaded receivables worth Rs 1,000 crore, but Sabharwal said the number was around Rs 400 crore in the last quarter.
ICICI an aggressive bank has been a pioneer in securitisation of loans. “We do play in this segment. We have been securitising both good and bad assets,” Sabharwal said.This sounds like they have sold the loans as a securitised portfolio. While the securities cannot be traded (as far as I know) they can be sold to someone who will then receive further interest and any recovered pricipal. So are home loans getting bad enough that the banks prefer to sell rather than recover? This may just be the beginningArcil aims to create a special purpose vehicle to handle mortgage backed securities.
... ..ICICI will still manage the securities such as collecting interest and handing it over to Arcil for a small fee. “At a future date when Arcil is ready, we will handover the management of the bad home loans to it,” said Sabharwal.
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>I guess time to get out of low qualify funds holding the securitised debt.
-Nagarajan
02.14.08 at 8:37 AM
>reduced IT spend will just add to the housing trouble here. Specifically in Bangalore which is one trick pony.
I hear many companies freezing their salary/variable pay and some even reducing/freezing headcount.
02.14.08 at 8:41 AM
>Arcil is a company jointly formed by few Indian Banks. So this toxic waste still remains inside India. If it could have been passed to criminal FIIs I would give ICICI Bank 100 marks.
02.14.08 at 1:26 PM
>Doesn’t this sound like the Presentation you have posted on the subprime. Looks like we are about to get into our very own subprime
02.19.08 at 2:35 PM