SEBI issued a consultation paper proposing alignment of capital market securitisation structures with RBI's regulatory framework. The proposal aims to harmonise rules governing securitised debt instruments, particularly for listed structures. SEBI proposes waivers for select deals involving RBI-regulated entities to reduce compliance duplication. The framework addresses differences between SEBI and RBI guidelines affecting banks and NBFCs in securitisation activities. Public comments are invited before final notification to enhance regulatory consistency and market efficiency.

Securitisation involves pooling financial assets like loans and issuing asset-backed securities to investors, providing liquidity to lenders and enabling risk transfer. Currently, SEBI and RBI have different regulatory approaches for securitisation, creating complexity for market participants operating across both frameworks. Banks and NBFCs engaging in securitisation face conflicting compliance requirements when transactions involve capital market structures. SEBI's proposal seeks regulatory harmonisation by aligning definitions, eligibility criteria, and operational requirements with RBI norms. The framework offers conditional waivers for transactions already complying with RBI guidelines, reducing regulatory overlap. This alignment is crucial for India's structured finance growth, as it will facilitate broader investor participation, improve market depth, and standardise disclosure norms. The proposal addresses risk concentration concerns in single-borrower transactions while maintaining flexibility for legitimate market activity. By reducing regulatory arbitrage and compliance costs, the harmonised framework supports the development of India's debt markets and improves integration between banking and capital market regulations, ultimately strengthening financial system stability.