What is securitisation?

Securitisation is the process through which existing assets or future cash flows are converted into marketable securities. Those assets or cash flows are, inherently, not marketable. There are two types of securitisation — assetbacked securitisation and futureflows securitisation. Some of the assets that can be securitised are loans and future cash flows like credit card payments, car rentals or any other form of future receivables. Securitisation is common in the US and Europe, but in India it is in a nascent stage.