The Parliament has enacted the Factoring Regulation (Amendment) Act, 2021 on 7th August, 2021. The amendment provides that every factor shall register the particulars of every transaction of assignment of receivables in his favor with the Central Registry set-up the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Where any trade receivables are financed through a Trade Receivables Discounting System, the particulars shall be filed with the Central Registry on behalf of the factor by the Trade Receivables Discounting System. Trade Receivables Discounting System means a payment system authorized by the Reserve Bank under the Payment and Settlement
Systems Act, 2007 for the purpose of facilitating financing of trade receivables.
