RBI constitutes Task Force on the Development of Secondary Market for Corporate Loans

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Mumbai : The Reserve Bank of India has constituted a 6 member Task Force on the Development of Secondary Market for Corporate Loans under the chairmanship of T.N.Manoharan, Chairman, Canara Bank. The members od the taskforce  V. G. Kannan,Chief Executive, Indian Banks’ Associatio, Bahram Vakil, Founding Partner, AZB and Partners, Dr. Anand Srinivasan, Additional Director (Research), CAFRAL , Dr. Sajjid Z. Chinoy, Chief India Economist, J P Morgan ,  Abizer Diwanji, Head – Restructuring & Turnaround Services, EY India.

RBI in its last Bimonthly Monetary Policy Review last month had announced the formation of this Task Force on development of secondary market for corporate loans.

The  Task Force will  review the existing state of the market for loan sale/transfer in India as well as the international experience in loan trading and will make recommendations on required policy/regulatory interventions for facilitating development of secondary market in corporate loans, including loan transaction platform for stressed assets. It’ll also make its recommendation on creation of a loan contract registry to remove information asymmetries between buyers and sellers, its ownership structure and related protocols such as standardization of loan information, independent validation and data access.

The Task Force will also recommend on design of the market structure for loan sales/auctions, including online platforms and the related trading and transaction reporting infrastructure. It may also recommend regarding  the need for, and role of, third party intermediaries, such as servicers, arrangers, market makers, etc. The Task force will suggest appropriate measures for enhanced participation of buyers and sellers in loan sale/transfer. The Task Force shall submit its report by the end of August 2019.

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