What is a securitisation and who are the parties involved in securitization? Briefly explain the action points or steps in securitisation?

Securitisation is the process of pooling and repackaging of homogenous illiquid financial assets into marketable securities that can be sold to investors. Basically securitisation is a method of raising funds by way of selling receivables for money. In recent decades, securitization gained prominence in developments in international finance. Primary parties in securitization are Banks or Financial Institutions that have lent loan against property, SPVs registered as Asset Reconstruction Company and investors, who have acquired security from SPV. Besides above, the obligator being original borrower, a rating agency and appointed administrator are involved in securitization. Steps involved in securitization are (a) Asset Reconstruction Company formed as SPV generally by banks or financial institutions acquires assets from the originator i.e. defaulting borrower; (b) the SPV, with the help of an investment banker, issues security receipts which are distributed to investors; and (c) the SPV pays the originator (original borrower of the loan) for the financial assets purchased with the proceeds from sale of securities. In the process of securitization methodology the lender bank or financial institution sweeps out non-performing assets that burdens a financial entity a virtual liability generate neither revenue nor leverage for further lending.