India – Provision Of Factoring Services By Banks – Review.

The circular of July 30, 2015 the providing of factoring services by banks and provides inter alia that:

(i) banks can carry out the business of factoring departmentally without obtaining the prior approval of RBI as long as the conditions prescribed in this circular are fulfilled,
(ii) banks cannot have shareholding in factoring companies (including subsidiaries) exceeding 10% of the paid up capital and reserves of the bank, and
(iii) banks must have a board approved "comprehensive factoring services policy" pursuant to which factoring services are provided by them. 

Circular