The Reserve Bank of India (RBI) on December 28, 2023, issued a notification regarding MHP Exemption for Transfer of Receivables.
To develop secondary market operations of receivables acquired as part of ‘factoring business’ as defined under the Factoring Regulation Act, 2011, it has been decided that transfer of such receivables by eligible transferors will be exempted from MHP requirement, subject to fulfilment of the following conditions:
i.The residual maturity of such receivables, at the time of transfer, should not be more than 90 days, and
ii.As specified under clauses 10 and 35 of these directions, the transferee conducts proper credit appraisal of the drawee of the bill, before acquiring such receivables.
Accordingly, a suitable proviso has been added to clause 39 of MD-TLE, through amendment dated December 28, 2023.
[Notification No. RBI/2023-24/99 DOR.STR.REC.60/21.04.048/2023-24]
