jurisdiction having legislation giving a preferential claim to deposits of home country in a winding up proceedings ; foreign banks that do not have adequate disclosure requirements in their home jurisdiction ; foreign banks with complex structures ; foreign banks which are not widely held could have maiden presence only by way of wos. also, if the reserve bank of india is not satisfied with the adequacy of supervisory arrangements ( including disclosure arrangements ) and market discipline in the country of their incorporation or reserve bank of india considers necessary for subsidiary form of presence of the bank or if a foreign bank, which has set up its presence in india through branch mode after august 2010, is considered by rbi as being systemically important by virtue of the size of its business, such banks would have to operate through a wos. however, in case of foreign banks which are operating in india before august 2010 shall have the option either to continue their banking business through the branch mode or to convert those branches into a wos. 17. foreign banks have evinced interest on wos structure in india and are deliberating internally their strategy on form of banking presence. the initial minimum paid - up voting equity capital for a wos shall be inr 5 billion ( nearly usd 82 million ). in the case of an existing foreign bank having branch presence in india, which desires or is required to convert into a wos shall have a net worth of inr 5 billion. wos would be permitted to open branches in any centre, except at certain sensitive locations from the perspective of national security, without having the need to take prior permission from reserve bank of india in each case, subject to their opening 25 % of branches in a year in unbanked centres. in the case of foreign bank branches, they may have to seek prior approval of reserve bank for branch expansion in india. 18. financial intermediation in india mainly happens through banks. with a view to improve upon the credit disbursement to certain sectors of the economy which requires stimulus through support from formal financial sector, priority sector lending was introduced in 1970s. the objective was to achieve a wider spread of bank credit, prevent its misuse, direct a larger volume of credit flow to priority sectors and to make it an effective instrument of economic development. the definition of priority sector has evolved over a period of time. priority sector includes those sectors of the economy which in the absence of inclusion in the priority sector categories would not get timely and adequate finance, such as, small loans

7. other proposals being considered internationally include a requirements for the originators to retain a portion of each securitization originated and a minimum period of retention of loans prior to securitization to give comfort to ensure adequate due diligence by the originator. indian securitisation market 8. the growth in the indian securitisation market has been largely fuelled by the repackaging of retail assets and residential mortgages and more recently by single loan selloff of corporate loans of banks and other financial entities. this market which has been in existence since the early 1990s, has matured only post - 2000 with an established narrow band of investor community and regular issuers. asset backed securitisation ( abs ) is the largest securitisation class driven by the growing retail loan portfolio of banks, investors ’ familiarity with the underlying assets and the short maturity of these loans. 9. though securitisation of auto loans remained the mainstay throughout the 1990s, over time, the market has spread into several asset classes – housing loans, corporate loans, commercial mortgage receivables, project receivables, toll revenues, and more recently, even microfinance loans have been securitised. within the auto loan segment, the car loan segment has been more successful than the commercial vehicle loan segment, mainly because of factors such as perceived credit risk, higher volumes and homogenous nature of receivables. other types of receivables for which securitisation has been attempted in the past include property rental receivables, power receivables, telecom receivables, lease receivables and medical equipment loan receivables. 10. the mortgage backed securities ( mbs ) market has been relatively slow in taking off despite a growing housing finance market due to the long maturity periods, lack of secondary market liquidity and the risk arising from prepayment / re - pricing of the underlying loan. unlike many international jurisdictions, though, mbs in india has not depended on direct or indirect government support / guarantee. 11. in the recent times, direct assignment of single loan or retail loan pools ( as against securitisation involving a special purpose vehicle, or spv ) has been gaining importance in india. the broad structure of such transactions is similar to that of regular abs or rmbs transactions, except for the absence of the issuance of any instruments like ptcs. the pool rec