Factoring Business In India

Factoring is a continuous arrangement between a financial institution and a company which sells goods and services to trade customers on credit.

Factoring business in india. The act defines the terms factoring business and factor. We can help unlock your business potentialread more. Notice of 11th agm sep 01 2020. In factoring a financial institution factor buys the accounts receivable of a company client and pays up to 80 rarely up to 90 of the amount immediately on agreement.

As per this arrangement the factor purchases the client s trade debts including accounts receivable. Factoring continue reading factoring in india. Forfaiting is a factoring arrangement used in international trade finance by exporters who wish to sell their receivables to a forfaiter. We aim to distinguish ourselves as one of the leading independent providers of specialised trade finance products in the country with the objective of supporting and contributing to the development of the indian economy to be an equal opportunity employer and an employer of choice and to ensure definitive growth to all stakeholders while ascertaining customer satisfaction.

Since then a number of companies have started factoring business in india. Sbi factors and commercials limited was the first factoring company to start its operation in india in april 1991. At present there are only 7 nbfc factors registered with rbi. A non banking financial company as defined in clause f of section 45 i of the reserve.

The factoring act 2011 defines the factoring business as the business of acquisition of receivables of assignor by accepting assignment of such receivables or financing whether by way of making loans or advances or in any other manner against the security interest over any receivables. India factoring attends webinar to discuss solutions for msmes may 05 2020. Sbi factors and commercial services private limited sbi factors a subsidiary of state bank of india is one of the leading factoring companies in india. The business of factoring in india is regulated by the factoring regulation act 2011 act 1.

In simple definition it is the conversion of credit sales into cash. The list of nbfc factors registered with rbi as on september 11 2018 is mentioned below. Section 2 i of the factoring regulation act 2011defines factor to mean. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

India factoring lauded by fci may 14 2020. The objective of the company is to provide factoring and forfaiting services encompassing finance and value added services efficiently and competently to business entities in the geographical location in india.