Microfinance company Bandhan Financial Services plans to sell Rs 500 crore worth of farm loans to IDBI Bank in what would be the biggest securitisation deal this year. Selling loans releases capital for MFIs and helps them deploy fresh loans to the poor without borrowing directly from banks. In securitisation, the portfolio goes off the seller's advances book and the risk gets transferred to the buyer. This, in turn, helps banks meet their annual priority sector and agriculture lending targets. "We are committed to strike a Rs 500-crore securitisation deal with IDBI Bank. The transaction will be through within a week," Bandhan chairman and managing director Chandra Shekhar Ghosh told ET.
Source: Economic Times
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