Full formBanking & Finance
SPVstands forSpecial Purpose Vehicle
Full Form of SPV
What is SPV?
A Special Purpose Vehicle (SPV) is a separate legal entity created by a parent company, bank, or financial institution to fulfil a specific, narrowly defined financial objective. In India, SPVs play a crucial role in banking, infrastructure development, and corporate finance, particularly since the post-1991 liberalisation era. Banks, non-banking financial companies, and public sector undertakings commonly form SPVs to isolate financial risk, securitise assets, or undertake large projects such as road construction, power generation, and real estate development. The Reserve Bank of India and SEBI regulate how SPVs operate, especially when they are used to raise funds through public issues, manage stressed assets, or structure public-private partnership models. Because an SPV maintains its own balance sheet, it attracts independent investors while shielding the parent company from direct liability. The concept is frequently tested in banking, finance, and company secretary examinations, making it essential for aspirants preparing for IBPS, RBI Grade B, CA, and CS exams to understand its structure, legal benefits, and regulatory framework within the Indian financial system.
SPV का फुल फॉर्म
विशेष प्रयोजन वाहन
Example
The National Highways Authority of India set up a Special Purpose Vehicle to raise funds from international investors for the Delhi-Mumbai expressway project, separating project liabilities from the parent organisation's balance sheet.
SPV — frequently asked questions
What is the full form of SPV?
SPV stands for Special Purpose Vehicle, which is a separate legal entity created by a company or financial institution to handle a specific financial transaction or project.
How is SPV used in Indian banking and finance?
Indian banks and NBFCs use SPVs to securitise assets, manage non-performing loans, undertake large infrastructure projects, and attract external investors while keeping parent company liabilities separate.
Which regulators oversee SPVs in India?
The Securities and Exchange Board of India regulates SPVs that raise funds from public investors, while the Reserve Bank of India issues guidelines for SPVs created by banks and financial institutions.