{"id":12500,"date":"2026-03-02T06:01:17","date_gmt":"2026-03-02T06:01:17","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=12500"},"modified":"2026-04-02T10:15:00","modified_gmt":"2026-04-02T10:15:00","slug":"what-are-pass-through-certificates-ptcs","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/","title":{"rendered":"What are Pass-Through Certificates (PTCs)?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Over the last few years, the securitisation market in India has experienced robust growth. In fact, securitisation rose 24% on-year to reach Rs. 2.35 Lakh Crore in fiscal year 2025 (<\/span><a href=\"https:\/\/www.crisilratings.com\/en\/home\/newsroom\/press-releases\/2025\/04\/securitisation-soars-to-a-new-high-of-rs-2-35-lakh-crore-in-fiscal-2025.html\"><span style=\"font-weight: 400;\">CRISIL<\/span><\/a><span style=\"font-weight: 400;\">). 54% of this growth came from PTCs.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">PTCs or pass-through certificates help investors earn returns from loans without actually lending them out. They provide original loan holders like banks and NBFCs with liquidity and investors with diversified exposure to a securitised debt asset that\u2019s backed by loans.\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#What_are_Pass-Through_Certificates_PTCs\" >What are Pass-Through Certificates (PTCs)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Key_Characteristics_of_PTC\" >Key Characteristics of PTC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#How_Do_Pass-Through_Certificates_Work\" >How Do Pass-Through Certificates Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Understanding_the_Role_of_PTCs_for_Securitisation_in_India\" >Understanding the Role of PTCs for Securitisation in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Benefits_and_Risks_of_PTCs\" >Benefits and Risks of PTCs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Things_to_Note_About_PTCs\" >Things to Note About PTCs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Tranche_Issuance\" >Tranche Issuance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Credit_Rating\" >Credit Rating<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Regulatory_Framework\" >Regulatory Framework<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Role_of_Servicer\" >Role of Servicer<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#Who_Can_Invest_in_PTCs\" >Who Can Invest in PTCs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#PTCs_Pass-On_Loan_Repayment_Benefits\" >PTCs Pass-On Loan Repayment Benefits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#FAQs_on_Pass-Through_Certificates\" >FAQs on Pass-Through Certificates<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#1_What_is_the_meaning_of_a_pass-through_certificate\" >1. What is the meaning of a pass-through certificate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#2_How_are_PTCs_regulated_in_India\" >2. How are PTCs regulated in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#3_How_are_PTCs_different_from_other_debt_investments_like_bonds_and_debentures\" >3. How are PTCs different from other debt investments like bonds and debentures?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-pass-through-certificates-ptcs\/#4_Can_retail_investors_invest_in_PTCs_in_2026\" >4. Can retail investors invest in PTCs in 2026?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_are_Pass-Through_Certificates_PTCs\"><\/span><b>What are Pass-Through Certificates (PTCs)?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Pass-through certificates are a form of securitised debt instrument. PTCs are produced when loans like home loans, auto loans, and education loans are bundled together and then sold as a security to investors. The cash flow from these underlying loans is \u2018passed through\u2019 to the PTC investor when borrowers repay the loans.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, for instance, let\u2019s say, a housing finance company has given out home loans worth Rs. 200 Crore to borrowers. Now, borrowers will pay this money back over a certain time period (EMIs), but the company needs to raise capital presently. It can still raise money by pooling the loans, packaging them as PTC securities, and selling them to investors. In this case, investors would benefit from the EMI repayments made by borrowers on these loans.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Key_Characteristics_of_PTC\"><\/span><b>Key Characteristics of PTC<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">These key characteristics of PTC will help you understand them better:\u00a0\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">PTCs are issued against debt securities to help the issuer spread risk.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">PTCs can include different assets like home loans, auto loans, microfinance loans, or trade receivables.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">PTCs are issued through Special Purpose Vehicles (SPVs).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">PTCs are typically preferred by institutional investors and ultra-HNIs.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"How_Do_Pass-Through_Certificates_Work\"><\/span><b>How Do Pass-Through Certificates Work?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">PTCs work through the process of securitisation, which simply means converting illiquid assets into tradeable securities. Here\u2019s a step-by-step guide on how PTCs are securitised and how they work:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Originator Identifies Loans: <\/b><span style=\"font-weight: 400;\">The originator is the bank or NBFC that owns the underlying assets, like loans and mortgages and wants to securitise them.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Selling to the SVP:<\/b><span style=\"font-weight: 400;\"> Next, the originator sells these loans to the SPV. SPVs are separate legal entities created for the purpose of this securitisation. The SPV becomes the owner of these loans.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Issuance of PTCs<\/b><span style=\"font-weight: 400;\">: The SPV issues pass-through certificates to investors, who then become legally entitled to receive the payments when borrowers repay the underlying loans.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Payment Distribution:<\/b><span style=\"font-weight: 400;\"> As borrowers repay these loans, the SPV distributes the repayments proportionately to the PTC holders.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Understanding_the_Role_of_PTCs_for_Securitisation_in_India\"><\/span><b>Understanding the Role of PTCs for Securitisation in India<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Now that you know the meaning of pass-through certificates and how they are issued and work, it\u2019s time to focus on why they are important. PTCs play an important role in the Indian securitisation market, especially for NBFCs and banks.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">They help these financial institutions to offload loan assets &#8211; like retail, auto, and microfinance loans &#8211; to free up capital for further lending. In fact, PTCs have been particularly important in offering liquidity support to NBFCs after volatile periods in the market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Over the years, securitisation through PTCs has also grown in India due to the RBI\u2019s strong regulatory frameworks like the SARFAESI Act. All this has been made a vital component of India\u2019s credit expansion ecosystem.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Benefits_and_Risks_of_PTCs\"><\/span><b>Benefits and Risks of PTCs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before considering PTCs, investors should be aware of their unique potential benefits and risks. Let\u2019s have a look at both:<\/span><\/p>\n<div class=\"pcrstb-wrap\"><table>\n<tbody>\n<tr>\n<td><b>Benefits<\/b><\/td>\n<td><b>Risks<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Potential to earn higher returns compared to traditional options like FDs and government bonds.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Returns may fall if borrowers repay their loans earlier than expected (prepayment risk)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Originators can sell off a portion of their loans to free up capital, which they can now use to issue more loans.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">If the borrowers default on the loans, it can impact cash flow to investors, especially junior tranche investors.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">PTC investors receive regular cash flows when repayments are made for the underlying loans.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Interest rate fluctuations can impact the market value of PTCs, because they are debt securities.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Investors have access to a diversified pool of loans, which can help lower risk exposure to any one type of loan or a single borrower.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Not easily tradable since PTCs are usually bought and sold outside exchanges (liquidity risk).<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">PTCs are backed by loans (collateralised) and have been vetted for credit enhancements to ensure good risk mitigation.\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">PTCs have a limited secondary market and have to generally be traded OTC (over-the-counter), which makes them less liquid than other investments like bonds and FDs.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Things_to_Note_About_PTCs\"><\/span><b>Things to Note About PTCs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Apart from all this, there are also a few other key aspects one should understand:<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Tranche_Issuance\"><\/span><b>Tranche Issuance<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">PTCs are issued in tranches. This simply means that the single pool of securitised assets is divided into different risk and return layers. So each PTC can have:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Senior tranches<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Mezzanine tranches<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Junior tranches<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This structure also dictates the order of payment and potential credit risk. In other words, senior tranches are paid first and may have lower risk as compared to junior tranches.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Credit_Rating\"><\/span><b>Credit Rating<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Before a PTC is sold, credit rating agencies like ICRA and CRISIL assess the risks associated with each tranche of the security. So, senior tranches, which may have the least risk, can receive a higher rating, while the junior ones may have lower ratings as riskier options.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Regulatory_Framework\"><\/span><b>Regulatory Framework<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The RBI regulates PTCs in India under the SARFAESI Act. It also has certain regulatory norms in place to ensure investor protection. For instance, the RBI requires a Minimum Retention Requirement under the Master Direction on Securitisation of Standard Assets as follows:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For loans with a maturity of 24 months or less: 5% of the book value of the securitised loans<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For loans with a maturity of more than 24 months: 10% of the book value of securitised loans.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For residential mortgage-backed securities: 5% of the book value, regardless of tenure.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Role_of_Servicer\"><\/span><b>Role of Servicer<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While the loan originator (bank\/NBFC) may handle repayments to the investors, typically, an independent third-party (Servicer) is appointed. The servicer is responsible for collecting repayments from borrowers and ensuring the transfer of funds to the PTC holders.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_Can_Invest_in_PTCs\"><\/span><b>Who Can Invest in PTCs?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">While PTCs may potentially offer better returns, their structure can be complex and harder to understand compared to simple products like FDs. That\u2019s why retail investors don\u2019t generally invest in PTCs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Typically, the following categories of investors prefer PTCs:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Institutional investors<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">HNIs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ultra-HNIs<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These investors have enough capital to invest in PTCs and also generally look for alternative investment avenues that may offer higher potential yields.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"PTCs_Pass-On_Loan_Repayment_Benefits\"><\/span><b>PTCs Pass-On Loan Repayment Benefits<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">So, PTCs are securitised debt products that help banks and NBFCs clear their loan books, while allowing HNIs to gain potentially better returns than traditional assets like bonds and FDs. But they carry risks like the possibility of default on the underlying loan. That\u2019s why, PTCs may be:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Good as diversifiers, not core allocations<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Suit experienced investors who understand risks properly<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Can be an alternative investment<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">But if you\u2019re looking to diversify your holdings into debt assets and don\u2019t wish to take on the higher risks associated with PTCs, you can head to the GoldenPi platform. Here, you can check out various corporate bond baskets to invest your capital, diversify, manage risks, and earn good returns.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs_on_Pass-Through_Certificates\"><\/span><b>FAQs on Pass-Through Certificates<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"1_What_is_the_meaning_of_a_pass-through_certificate\"><\/span><b>1. What is the meaning of a pass-through certificate?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A pass-through certificate is a type of securitised debt, where a bank or NBFC pools its loans, packages them as tradable assets, and sells them to investors. PTC investors earn returns when the underlying loans are repaid.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_How_are_PTCs_regulated_in_India\"><\/span><b>2. How are PTCs regulated in India?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">PTCs are primarily regulated by the RBI in India through comprehensive guidelines and requirements, including the SARFAESI Act and the Master Direction &#8211; Reserve Bank of India (Securitisation of Standard Assets) Directions, 2021.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_How_are_PTCs_different_from_other_debt_investments_like_bonds_and_debentures\"><\/span><b>3. How are PTCs different from other debt investments like bonds and debentures?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">PTCs are different from bonds and debentures mainly in how returns are generated.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Source of returns:<\/b><span style=\"font-weight: 400;\"> Bonds pay fixed interest from one issuer, while PTCs pay from a pool of loan EMIs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cash flows:<\/b><span style=\"font-weight: 400;\"> Bonds are more predictable, PTC payouts can vary based on repayments<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Risk:<\/b><span style=\"font-weight: 400;\"> Bonds depend on one issuer, while PTCs spread risk across multiple borrowers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Complexity:<\/b><span style=\"font-weight: 400;\"> Bonds are simpler, PTCs are more structured and harder to understand<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"4_Can_retail_investors_invest_in_PTCs_in_2026\"><\/span><b>4. Can retail investors invest in PTCs in 2026?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While technically retail investors can invest in PTCs, they are better suited for institutional investors and HNIs. That\u2019s because PTCs require a higher minimum investment and may be complex to understand for regular, retail investors.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Disclaimer:<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">This information is for general information purposes only. GoldenPi makes no guarantee on the accuracy of the data provided here; the information displayed is subject to change and is provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. Investments in the securities market are subject to market risks. Read all the offer-related documents carefully before investing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bonds or non-convertible debentures (NCDs) are regulated by the Securities and Exchange Board of India and other government authorities. GoldenPi Securities Private Limited is a registered debt broker and acts as a distributor and not as a manufacturer of the product.<\/span><\/p>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the meaning of a pass-through certificate?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"A pass-through certificate (PTC) is a securitised debt instrument where a bank or NBFC pools loans, converts them into tradable securities, and sells them to investors. 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