Launch of the Website and Logo
In pursuance of the recommendation of the Task Force Report and directives of RBI, the “Secondary Loan Market Association (SLMA) – a Self-Regulatory Body was incorporated in August 2020 as a Section 8 Company and the Company’s website and Logo were digitally launched on August 11, 2021 by Shri Saurav Sinha, Executive Director, Reserve Bank of India. Shri Ashwani Bhatia (MD – Corporate Banking & Global Market) and Shri Swaminathan J (MD- Risk Compliance and Stressed Assets Resolution Group) and Smt. Vishakha Muley, ED, ICICI Bank also graced the occasion along with the top executives of other member banks.
The present SLMA members are State Bank of India, ICICI Bank, Canara Bank, Standard Chartered Bank, Kotak Mahindra Bank, Deutsche Bank, Bank of Baroda, Punjab National Bank, Axis Bank and HDFC Bank.
The SLMA will facilitate, promote and set up an online platform for standardization and simplifying primary loan documentation for purchase and sale, and other trending mechanism for the secondary loan market.
Speaking on the occasion, Shri Saurav Sinha, Executive Director, Reserve Bank of India, dwelt upon the necessity of creating an active secondary market for loans in India and the benefits it will offer to the various stakeholders by way of capital optimization, liquidity management, risk management, exposure rebalancing and efficient price discovery mechanism. He also stated, since smaller banks are generally constrained for various reasons from participating in large and creditworthy lending exposures at the time of origination, the secondary market can enable them to participate in such exposures at a later stage and constraints faced under the Large Exposure Framework will be a thing of the past. Shri Sinha also emphasized on the essential pre-requisite for a vibrant secondary market viz. an ecosystem of market intermediaries like facility agents, security trustee, arrangers, valuation agencies, etc. Further SLMA will provide the banks and other participants a window for managing their loan assets portfolio.
Shri Ashwini Bhatia, MD, State Bank of India, stated that the conceptualization and operationalization of SLMA in a time bound manner is an appropriate response to the long felt need for wider participation in the loan market aided by appropriate risk mitigation. He further stated that presently, the primary and secondary markets are restricted to Banks and NBFCs, domestic and foreign investors participate only in distressed debt through ARCs. As such, there is a felt need to expand the spectrum of investors in the secondary market and AIFs (Alternative Investments Funds) / Mutual funds to invest in the secondary loan market.
Shri Sanjay Srivastava, Chairman, SLMA, stated that the secondary market for loans in India will evolve on the strength of a systematic digital loan trading platform, standardization of documents, active participation by stake holders and effective price discovery mechanism. The main objective of SLMA is to create an environment conducive for trading of loans in the secondary market by promoting greater flexibility and efficiency.
Shri Sunil Mehta, Chief Executive, Indian Banks’ Association (IBA), stated that currently the IBA, is actively working on development of syndicated loan market in India and one of the key success factors for such market will be the parallel development of secondary market for sale of loan.
The present SLMA members are State Bank of India, ICICI Bank, Canara Bank, Standard Chartered Bank, Kotak Mahindra Bank, Deutsche Bank, Bank of Baroda, Punjab National Bank, Axis Bank and HDFC Bank.
The SLMA will facilitate, promote and set up an online platform for standardization and simplifying primary loan documentation for purchase and sale, and other trending mechanism for the secondary loan market.
Speaking on the occasion, Shri Saurav Sinha, Executive Director, Reserve Bank of India, dwelt upon the necessity of creating an active secondary market for loans in India and the benefits it will offer to the various stakeholders by way of capital optimization, liquidity management, risk management, exposure rebalancing and efficient price discovery mechanism. He also stated, since smaller banks are generally constrained for various reasons from participating in large and creditworthy lending exposures at the time of origination, the secondary market can enable them to participate in such exposures at a later stage and constraints faced under the Large Exposure Framework will be a thing of the past. Shri Sinha also emphasized on the essential pre-requisite for a vibrant secondary market viz. an ecosystem of market intermediaries like facility agents, security trustee, arrangers, valuation agencies, etc. Further SLMA will provide the banks and other participants a window for managing their loan assets portfolio.
Shri Ashwini Bhatia, MD, State Bank of India, stated that the conceptualization and operationalization of SLMA in a time bound manner is an appropriate response to the long felt need for wider participation in the loan market aided by appropriate risk mitigation. He further stated that presently, the primary and secondary markets are restricted to Banks and NBFCs, domestic and foreign investors participate only in distressed debt through ARCs. As such, there is a felt need to expand the spectrum of investors in the secondary market and AIFs (Alternative Investments Funds) / Mutual funds to invest in the secondary loan market.
Shri Sanjay Srivastava, Chairman, SLMA, stated that the secondary market for loans in India will evolve on the strength of a systematic digital loan trading platform, standardization of documents, active participation by stake holders and effective price discovery mechanism. The main objective of SLMA is to create an environment conducive for trading of loans in the secondary market by promoting greater flexibility and efficiency.
Shri Sunil Mehta, Chief Executive, Indian Banks’ Association (IBA), stated that currently the IBA, is actively working on development of syndicated loan market in India and one of the key success factors for such market will be the parallel development of secondary market for sale of loan.
