The Hindu Business Line : Banks refinance for factoring cos

Mumbai, Feb. 12 The Reserve Bank of India, today, permitted banks to extend refinance to factoring companies, provided the companies carry out all components of a standard factoring activity and derive at least 80 per cent of their income from factoring activity.

In a circular today, the RBI said, “In view of the special nature of the business undertaken by these companies, it has been decided that, henceforth, banks can extend financial assistance to support the factoring business of factoring companies.” However, in order to receive bank financing these companies should meet certain conditions.

According to the RBI circular, these companies should carry out all the components of standard factoring activity, i.e., financing and acollection of receivables and sale-ledger management. At least 80 per cent of the company’s assets should be receivables purchased or financed, irrespective of whether on ’with recourse’ or ’without recourse’ basis.

More Stories on : Credit Market | RBI & Other Central Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Implement sugar package in ‘letter & spirit’, bank chiefs told

Service providers: IBA circulates first ‘blacklist’

Rupee tad higer

Banks pitch for tax sops on infrastructure loans

Catholic Syrian net profit up 139%

More foreign banks keen to open offices here

Chidambaram signals more credit for housing, consumer durables

Canara Bank cuts BPLR by 25 basis points

Bank of Maharashtra cuts lending rates

G-7’s message is downbeat

Bond prices fall

ARCIL sells NPAs

Banks refinance for factoring cos

Call rates drop