Securitization is a process where long-term financial assets like loans are pooled together and converted into marketable securities that can be sold to investors. This provides the originator with cash while transferring the credit risk to the investors. The document discusses the parties and stages involved including identification of assets, transfer to a special purpose vehicle, issuing securities to investors, and redemption upon repayment or default of underlying assets. Guidelines are provided on selecting high quality assets and ensuring proper structures, risk ratings, and regulations are in place for a successful securitization program.

1. Securitization of debt 1.What is Securitization It is a technique by which a long term,non-negotiable and high valued financial assets like hire purchase is converted into securities of small values which can be tradable in the market just like shares. It is a process of removing long term assets from the balance sheet of a leading financial institution and replacing them with liquid cash through the issue of securities against them.