Factoring in India though has grown up both in experience and expertise. However, it still is considered to be at a nascent stage. The enactment of the Factoring Regulation Act, 2011 is considered to be a milestone in this direction. To understand it further and to promote factoring in India ASSOCHAM had organised a Global Factoring Summit in Mumbai recently. Apart from Sudarshan Sen, Executive Director - RBI, it was attended by D.S. Rawat, Lee Kheng Leong, Sandeep Mathkar and Kishore Pradhan.
One of the impediments in the healthy functioning of factors is the non-availability of recourse under the provisions of Securitizations and Reconstructions of Financial Assets and Enforcement of Security Interests (SARFAESI). However, last year the benefit of reinforcement of security interest was extended to all systemically important NBFCs including NBFC factors. This is expected to improve recovery by factors and reduce their NPA levels. Trade Receivable Discounting System (TReDS) will not only facilitate discounting of invoices and bills of exchange but it will also greatly facilitate the factoring business.
Sundeep Mohindru, Director, Mynd Solutions giving his views on TReDS and future of business finance.
Kishore Pradhan, Sundeep Mohindru, Director - Mynd Solutions, Kashinath Katakdhond, Managing Director & CEO – RXIL, and Kalyan Basu, Managing Director & CEO - A. TREDS