i) Securitization
Securitization is the financial practice of pooling various types of debt—such as mortgages, auto loans, or credit card debt—and selling the consolidated debt as securities to investors. The underlying assets are sold to a special purpose vehicle (SPV) or special purpose entity (SPE), which then issues securities backed by the pooled assets. The goal is to transform illiquid assets into liquid securities, thereby providing liquidity to the originators and potentially offering higher yields to investors.

ii) Reverse Repurchase Agreement (Reverse Repo)
A reverse repurchase agreement, or reverse repo, is a transaction where one party buys securities with the agreement to sell them back at a later date at a higher price. This is effectively a short-term loan where the seller agrees to repurchase the securities at a later date. For the buyer, it is a way to invest funds and earn interest. Reverse repos are commonly used by financial institutions to manage short-term liquidity needs.

iii) Banker’s Acceptance (BA)
A banker’s acceptance is a short-term credit investment created by a non-financial firm and guaranteed by a bank. It is a form of trade finance where the bank guarantees payment to the seller on a specified date, and the buyer agrees to pay the bank at a later date. BAs are used to facilitate international trade and are considered low-risk since they are backed by the bank’s creditworthiness.

iv) Commercial Paper
Commercial paper is an unsecured, short-term debt instrument issued by corporations to finance their short-term liabilities, such as accounts payable and inventories. It is typically issued at a discount to face value and matures within 270 days. Commercial paper is considered a low-risk investment and is generally issued by companies with high credit ratings. It provides a flexible and quick source of funding for companies.