SPV meaning in Banking ?

Answer:

What is Special Purpose Vehicle mean?

A special-purpose entity (SPE; or, in Europe and India, special-purpose vehicle/SPV; or, in some cases in each EU jurisdiction, FVC, financial vehicle corporation) is a legal entity (usually a limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or temporary objectives. SPEs are typically used by companies to isolate the firm from financial risk. A formal definition is "The Special Purpose Entity is a fenced organization having limited predefined purposes and a legal personality".

Normally a company will transfer assets to the SPE for management or use the SPE to finance a large project thereby achieving a narrow set of goals without putting the entire firm at risk. SPEs are also commonly used in complex financings to separate different layers of equity infusion. Commonly created and registered in tax havens, SPEs allow tax avoidance strategies unavailable in the home district. Round-tripping is one such strategy. In addition, they are commonly used to own a single asset and associated permits and contract rights (such as an apartment building or a power plant), to allow for easier transfer of that asset. They are an integral part of public private partnerships common throughout Europe which rely on a project finance type structure.

A special-purpose entity may be owned by one or more other entities and certain jurisdictions may require ownership by certain parties in specific percentages. Often it is important that the SPE is not owned by the entity on whose behalf the SPE is being set up (the sponsor). For example, in the context of a loan securitization, if the SPE securitization vehicle were owned or controlled by the bank whose loans were to be secured, the SPE would be consolidated with the rest of the bank's group for regulatory, accounting, and bankruptcy purposes, which would defeat the point of the securitization. Therefore, many SPEs are set up as 'orphan' companies with their shares settled on charitable trust and with professional directors provided by an administration company to ensure that there is no connection with the sponsor.

reference

Full Form	Category
Sepik Plains	Airport Code
Special Purpose Vehicle	Banking
Scald Protection Valve	Business
SPelling Variant	Community
Service Profile at the Visited location	Computer and Networking
Sparse Pixel Vectorization	Computing
Sampler Performance Validation	Computing
Smart Phone Video	Computing
Sound Pictures and Video	Computing
Specific Volume	Computing
Simplified Payment Verification	Computing
Spatiul Privat Virtual	Computing
Surface Photovoltage Spectroscopy	Electronics
Spectrum Pursuit Vehicle	General
Smart Proactive Vehicle	General
Screw Propelled Vehicle	General
Stable Platform Valve	General
Sounds Pictures And Video	General
Steam Powered Video	General
Synthetic Performance Value	General
Sapeur Pompier Volontaire	General
Super Pro Vulc	General
Strong Polar Vortex	General
Siamese Palm Viper	General
Simple Payment Verification	General
Sound Picture Video	General
Signal Peak Ventures	General
Sound Photo Video	General
Sound Pictures Video	General
Solar Power Vehicle	General
Special Performance Vehicle	General
Solenoid Spill Valve	General
Semi Panel Van	General
Sport Performance Vehicle	General
Specialty Vehicle	General
Support Vehicle	General
Single Person Vehicle	General
Standard Presumptive Value	General
Servicio Post Venta	General
Special Protected Vehicle	General
Speed Violation	General
Struck Parked Vehicle	General
Self Propelled Vehicle	General
Special Purchase Vehicle	General
Safety Plus Vehicle	General
Starting Parked Vehicles	General
Spritzversteller	General
Standard Presumptive Values	General
Special Purpose Visa	Governmental
South Park Vandals	Governmental
Spectrum Patrol Vehicle	Governmental
Special Purpose Vehicles	Governmental
SIVAPUR	Indian Railway Station
Secretaría de Protección y Vialidad	International
Special People Visiting	Internet
Saccadic Peak Velocity	Medical
Sheep Pox Virus	Medical
simian parvovirus	Medical
splenoportovenography	Medical
Statement of Personal Values	Medical
Stentless Porcine Valve	Medical
Systolic Peak Velocity	Medical
Systolic Pressure Variation	Medical
Sepik Plains, Papua New Guinea	Regional
Sun Probe Near Limb of Venus	Space Science
Sound, Picture, and Video	Space Science
Sound, Picture, Voice	Telecommunication