The International Financial Services Centres Authority (IFSCA) on May 22, 2023, issued a circular regarding the Clarification of Guidelines on Factoring and Forfaiting of Receivables
This has a reference to the circular No. 172/ IFSCA/ Finance Company Regulations/ 2021-22/10 titled ‘Guidelines on Factoring and Forfaiting of Receivables’
The following has been clarified namely: -
•it is clarified that the due date as mentioned in clause 24.1 which states “The receivable acquired under factoring which is not paid by the due date, should be treated as NPA irrespective of when the receivable was acquired by the factor or whether the factoring was carried out on a “recourse basis” or “non-recourse” basis. The entity on which the exposure was booked should be shown as NPA and provisioning be made accordingly.”
• it has been clarified that the due date mentioned in the sub-clause shall be considered 90 days from the specified due date for payment.
• A copy of this circular is available on the website of the Authority at www.ifsca.gov.in/circular
[Circular No. F. No 172/ IFSCA/Finance Company Regulation/2023-24/1]
