T N Manoharan RBI committee for secondary market in corporate loans

The Reserve Bank of India (RBI) has constituted a six-member task force, headed by Canara Bank chairman T.N. Manoharan, on the development of secondary market for corporate loans. The terms of reference of the task force would include review of the existing state of the market for loan sale or transfer in India as well as the international experience in loan trading. Further the task force will be required to make recommendations on required policy or regulatory interventions for facilitating development of secondary market in corporate loans, including loan transaction platform for stressed assets. The task force has been asked to submit its report by the end of August 2019. In India, banks sell their stressed loans to the Asset Reconstruction Companies, but have practically no other alternatives. However, globally, there is a healthy corporate loan market where banks can offload their stressed assets and those get traded.