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Direct Assignment Business: Become Compliant with Statutory Regulations using SimSmart

  • Writer: Abhijit Shankaran
    Abhijit Shankaran
  • Apr 18
  • 2 min read

The Reserve Bank of India (RBI) in India plays an important role in setting the regulatory framework for the legal and fair functioning of Direct assignment business.


The stakeholders involved in a direct assignment deal, namely the Buyers (Investors) and Originators (original owners of the loan portfolio), must both comply and adapt to the same.

The challenge with compliance arises when the direct assignment business is carried out in a manual environment. A manual environment is either the absence of automated technology infrastructure or the minimum usage of legacy IT systems to handle loan operations and workflows.



What is the importance of compliance in Direct Assignment?


In a Direct Assignment deal, the originator is responsible for operational matters because loan management processes are carried out on behalf of the buyer.


While the buyer is not directly involved in managing loan operations, they shoulder the credit risk of the loan portfolio.


Hence the activities carried out by the originator on their behalf directly affect their profitability and reputation.


What are the regulations to comply with?


Some regulations to be complied with include:


  • Minimum Retention Requirement (MRR),

  • True Sale Criteria

  • Reporting & Disclosure Requirements and

  • Prudential norms


The regulations changes may involve changes/additions to:


  • Reporting standards

  • Risk assessment criteria and

  • Procedural aspects

Challenges faced in complying with changing statutory regulations


How to overcome the challenges of a manual environment?


The challenges that manual environments create are overcome with automated solutions that provide the necessary visibility and accountability of activities set in place. Especially when working with bulk loan portfolios and with expected quick turnaround time (TAT).

We offer SimSmart a comprehensive technology solution designed for both the Buy and Sell side of a Direct Assignment deal. SimSmart enables you to automate your direct assignment operations end-to-end without any hassle.





SimSmart ensures compliance with statutory Regulations

SimSmart addresses the twofold challenges of complying with statutory regulations below.




About SIMSOL


SimSol is an ISO/IEC 27001:2022 certified product company specializing in lending technology solutions for Banks, NBFCs, and Financial Institutions. Our solutions also extend to insurance companies and Telcos. With a foundation of over 100 years of combined banking expertise, our solutions leverage the latest in technology and software development practices to deliver exceptional robustness, scalability, and efficiency

  • Business Process Management

  • Enterprise Resource Planning

  • Business Intelligence

  • Knowledge Process Outsourcing




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