Has the cover fallen off Covered Bonds?
– Anita Baid, anita@vinodkothari.com
Recent activity in the Covered Bonds space
- The Covered Bond issuance have been surging in the Indian market since 2019
- FY 2019 witnessed the first instance of covered bonds, which was backed by vehicle loan
- Issuance of covered bonds witnessed a sharp growth in FY 2021, as the numbers increased to INR 22 Bn, as against INR 4 Bn in FY 2020[1]
- However, certain media reports suggest that the recent RBI regulations on transfer of loan exposures have killed the market for Covered Bonds[2]