The International Financial Services Centres Authority (IFSCA) on August 17, 2021 has issued Guidelines on Factoring and Forfaiting of Receivables to regulate the Factoring and Forfaiting activity. The guidelines directs that every Factor and/or ITFS on behalf of the Factor, as the case may be, shall register the particulars of every transaction of assignment of receivables in its favour with the Central Registry set-up under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
The assignee undertaking factoring business shall ensure proper and adequate control and reporting mechanisms and assignee must be fully aware of the risks involved in factoring transactions.
