Context: Recently, RBI has released draft Frameworks for ‘Sale of Loan Exposures’ and ‘Securitisation of Standard Assets’.
These draft guidelines are applicable to:

• Scheduled Commercial Banks (excluding Regional Rural Banks)
• All India Financial Institutions (NABARD, NHB, EXIM Bank, and SIDBI) 
• All Non-Banking Financial Companies (NBFCs) including Housing Finance Companies (HFCs).

Salient features of draft guidelines

• Only transactions that result in multiple tranches of securities being issued reflecting different credit risks will be treated as securitisation transactions.
• Two capital measurement approaches have been proposed: Securitisation External Ratings Based Approach (SEC-ERBA) and Securitisation Standardised Approach (SEC-SA).
• A special case of securitisation, called Simple, Transparent and Comparable (STC) securitisations, has also been prescribed. 
• The definition of securitisation has been modified to allow single asset securitisations.
• Securitisation of exposures purchased from other lenders has been allowed.
• Standard Assets would be allowed to be sold by lenders through assignment or a loan participation contract. 
• The Stressed Assets, however, would be allowed to be sold only through assignment or novation.