Securitisation

Pooling loans and selling claims on their cash flows to investors, which moves the assets off the originator's balance sheet and releases capital.

For an Indian non-bank it is both a funding tool and a liquidity valve, and volumes rise sharply when other funding routes tighten.

The analytical question is what risk was actually transferred. Where the originator retains a first-loss piece or provides credit enhancement, the economic exposure stays even though the accounting exposure has gone, and the disclosure of retained interests is where that is visible.

Off the balance sheet is not the same as out of the business.