: RBI amends Factoring Regulation Act, 2011; eases regulations to make room for more NBFCs to participate in business #finance #StockMarketNEWS RBI amends Factoring Regulation Act, 2011; eases regulations

RBI amends Factoring Regulation Act, 2011; eases regulations to make room for more NBFCs to participate in business #finance #StockMarketNEWS
RBI amends Factoring Regulation Act, 2011; eases regulations to make room for more NBFCs to participate in business New Delhi, Jan 21 (KNN) The Reserve Bank Of India (RBI) has amended the Factoring Regulation Act, 2011 widening the scope of companies that can undertake factoring business.

The Act permits Trade Receivables Discounting System (TReDS) to file the particulars of assignment of receivables transactions with the Central Registry on behalf of the Factors for operational efficiency.

Further, the Act empowers the Reserve Bank of India to make regulations prescribing the manner of the grant of certificate of registration and for prescribing the manner of filing of assignment of receivables transactions by TReDS on behalf of the Factors.

Under the provisions of the regulations, all existing non-deposit-taking NBFC-Investment and Credit Companies (NBFC-ICCs) with asset size of Rs 1000 crore & above will be permitted to undertake factoring business subject to satisfaction of certain conditions.

This will increase the number of NBFCs eligible to undertake factoring business significantly from 7 to 182. Other NBFC-ICCs can also undertake factoring business by registering as NBFC-Factor.

Further, in respect of trade receivables financed through a Trade Receivables Discounting System (TReDS), the particulars of assignment of receivables shall be filed with the Central Registry on behalf of the Factors by the TReDS concerned within 10 days.

Both of these regulations are published in Official Gazette ExtraordinaryPart-III, Section 4 dated January 17, 2022, as RBI mentioned in its press release.

Other NBFC-ICCs can also undertake factoring business by registering as NBFC-Factor.

Eligible companies may apply to the Reserve Bank for seeking registration under the Act.