Factoring and Forfaiting

Size: px
Start display at page:

Download "Factoring and Forfaiting"

Transcription

1 Factoring and Forfaiting -A fund/fee based financial service Prof. Nishant Dhruv,

2 What is Factoring? Definition: Factoring provides resources to finance receivables as well as facilitates the collection of receivables

3 Functions Provision for collection of credit sales Administration of sales ledger Financing Trade Debt (Credit Sales) Credit Management and covering credit risk involved

4 Types of Factoring Recourse Factoring Non-recourse Factoring Advance and Maturity Factoring Old line Factoring/Full Factoring International Factoring

5 Mechanism of Factoring 1. Customer places order, client delivers good and sends invoice 2. Clients assigns invoice to factor 3. Factor makes prepayment (about 80%) 4. Monthly Statement of a/c to customers 5. Customer makes payment to factor 6. Factor makes balance 20 % payment to client

6 Cost of Factoring Services The factor provides various services at a charge. Costing can be segregated in two ways Commission : a charge for collection Discount Charge: interest charge, for short-term financing by factor between the date of advance payment and date of guaranteed payment

7 Legal Aspects of Factoring Client serves a notice of assignment to customers Client provides all evidences A factor requires a power of attorney to assign debts. Legal status of the factor is that of assignee Letter of disclaimer is required by factor in case of multiple finance Attracts stamp duty

8 Advantages of Factoring To the client (Company) Conversion of credit sales into cash Competitive credit terms to buyers Free from tensions of monitoring sales ledger Close interaction among working capital & other components Expand business To the customer (Buyers) Facilitates credit purchases Save on bank charges Less paperwork Does not impinge on the customer s rights

9 Cash Credit vis-à-vis Factoring Cash Credit Factoring Margin retained 40-50% Margin retained 20% Client submits various statements to banks Factor furnishes report to both client and cust. Banks do not render debt collection services No grace period allowed Variable processing fees Factor renders debt collection services Grace period allowed Fixed processing fees

10 Bill Discounting vis-à-vis Factoring Bills Discounting Always with Recourse Factoring Can be either Recourse or Non recourse Each bill to be individually accepted One time notification taken from customer Expensive source More paperwork Less expensive Less paperwork Facility only on Provision for Finance Also provides other services Submission of original documents required It is shown in balance sheet No assignment of debts Only copies of such documents It is off balance sheet mode Assignment of debts

11 Forfaiting Forfaiting is the discounting of international trade receivables on a 100% without (non) recourse basis.

12 Origin of Forfaiting The term forfait is a french word which means relinquish a right. Forfaiting has been evolved in around 1960s. In India, RBI approved forfaiting as an export financing option in the year 1992.

13 Characteristics of Forfaiting The exporter is insulated against the possibility of default. Trade receivables are required to be denominated in a freely convertible currency. Credit period can range from 60 days to 10 years. Forfaiting is flexible as well as tailormade.

14 An importer s obligation is normally supported by a local bank guarantee or an aval.

15 Forfaiting is used in following siuations: It s more suitable for high value exports. There should be request for deferred payment for more than 60 days. The contract is for atleast USD 1,00,000 or its equivalent, in a freely convertible currency. Either bank guarantee or letter of credit should be available.

16 Commercial bank usually do not fund credit risk beyond the period of 180 days. Hence

17 Pricing of a Forfaiting transaction The pricing consist of four elements : Interest Rate Commitment Fees Handling Fee

18 Flow chart of Forfaiting Transaction 1. Commitment to purchase debt 2. Commercial Contract 3. Delivery of Goods 4. Gives Guarantee 5. Forwarding the documents 6. Delivers documents 7. Makes Payment (Advance Payment) 8. Present document on maturity 9. Repays at Maturity 10. Payment to forfaiter.

19 Difference Between Forfaiting and Factoring Forfaiting Factoring For International credit For transactions of short-term transactions of long-term maturity maturities 100% financing without recourse Can be with or without recourse Cost borne by importer (buyer) Cost borne by seller(client) A forfaiter and a bank involved No bank involved Sales ledger is not administered The entire sales ledger is administered for some fixed fee

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS.

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS. Bill Discounting While discounting a bill, the Bank purchases the bill receivable to the Exporter (i.e. Bill of Exchange or Promissory Note) before its due date and credits the value of the bill to the

More information

Factoring and forfaiting. International financial settlements 120881-1165

Factoring and forfaiting. International financial settlements 120881-1165 Factoring and forfaiting 1 Factoring Factoring is a transaction where the exporter sells its receivables to an institution The factoring institution buys the receivables without recourse Due to increased

More information

LESSON 13: FACTORING THEORETICAL FRAMEWORK

LESSON 13: FACTORING THEORETICAL FRAMEWORK LESSON 13: FACTORING THEORETICAL FRAMEWORK Lesson Objectives To understand the Concept of Factoring. Methodology of Factoring and Forfeiting. Types of factoring. Introduction Receivables constitute a significant

More information

Forfaiting. An Introduction

Forfaiting. An Introduction Forfaiting An Introduction FINANZ AG ZÜRICH 10 Bleicherweg PO Box 900 CH - 8070 Zurich Switzerland Telephone: +41 1 211 28 30 Telefax: +41 1 211 38 54 www.finanzag.csfb.com Forfaiting is a trade finance

More information

Subject. PAPER No. : Financial Management MODULE No. : Factoring services

Subject. PAPER No. : Financial Management MODULE No. : Factoring services Subject Paper No. and Title Module No. and Title Module Tag Paper No.8: Financial Management Module No. 36: Factoring services COM_P8_M36 TABLE OF CONTENTS 1. Learning outcomes 2. Introduction 3. Mode

More information

Management of Receivables

Management of Receivables Management of Receivables Different costs involved in maintaining the debtors: 1. Interest. 2. Discount. 3. Collection Charges. 4. Bad Debts. Different approaches of calculating Interest: Total Cost approach.(priority)

More information

FORFAITING IMPROVE YOUR CASH FLOW & MITIGATE RISK - WHILE OFFERING YOUR CUSTOMERS EXTENDED PAYMENT TERMS

FORFAITING IMPROVE YOUR CASH FLOW & MITIGATE RISK - WHILE OFFERING YOUR CUSTOMERS EXTENDED PAYMENT TERMS Financing International Sales using Forfaiting Presented by Gregory Bernardi LFA FORFAITING IMPROVE YOUR CASH FLOW & MITIGATE RISK - WHILE OFFERING YOUR CUSTOMERS EXTENDED PAYMENT TERMS 1 FORFAITING AGENDA

More information

Discounting. Factoring & Forfeiting Summary

Discounting. Factoring & Forfeiting Summary Chapter 7 Discounting. Factoring & Forfeiting Summary The financial service sector is developing at rapid pace in India. This is just because of the emerging needs of the economy. Many innovative schemes

More information

FORFAITING A USER'S GUIDE WHAT IT IS, WHO USES IT AND WHY?

FORFAITING A USER'S GUIDE WHAT IT IS, WHO USES IT AND WHY? FORFAITING A USER'S GUIDE WHAT IT IS, WHO USES IT AND WHY? By: John F Moran, Jr. Abstract Italian and West German exporters have long been familiar with Forfaiting and still provide the bulk of the market.

More information

Discounting, Factoring & Forfeiting

Discounting, Factoring & Forfeiting Discounting, Factoring & Forfeiting Introduction Bill Discounting Factoring- Meaning & Definition Modus Operandi Terms of Agreement Functions Types of Factoring Factoring Vs Discounting Cost of Factoring

More information

FORFAITING. A useful tool in Trade Finance

FORFAITING. A useful tool in Trade Finance 1. What is Forfaiting? 2. Which instruments are eligible for forfaiting? 3. Why does the Exporter like the forfaiting tool? 4. What is the advantage for the Importer? 5. Any advantage for the Importers

More information

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Management of Accounts Receivable Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Maintaining Accounts Receivables

More information

THE EUF GLOSSARY ON FACTORING AND COMMERCIAL FINANCE

THE EUF GLOSSARY ON FACTORING AND COMMERCIAL FINANCE Nom T THE EUF GLOSSARY ON FACTORING AND COMMERCIAL FINANCE Version 1.0 June 2012 A Common Terminology for the Industry The EUF Glossary on Factoring and Commercial Finance wishes to contribute to the establishment

More information

CHAPTER 28 RECEIVABLES MANAGEMENT AND FACTORING

CHAPTER 28 RECEIVABLES MANAGEMENT AND FACTORING CHAPTER 28 RECEIVABLES MANAGEMENT AND FACTORING Q.1 Explain the objective of credit policy? What is an optimum credit policy? Discuss. A.1 The objective of credit policy is to promote sales up to that

More information

Factoring Services WHAT IS FACTORING? MECHANICS OF FACTORING

Factoring Services WHAT IS FACTORING? MECHANICS OF FACTORING Factoring Services S Balasubramanian, Vice President (Finance) & Company Secretary, Canbank Factors Ltd., Bangalore. Realisation of outstanding dues is increasingly becoming a complicated and tedious exercise.

More information

PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007. Global Trade Finance Ltd

PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007. Global Trade Finance Ltd PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007 o Incorporated in March 2001 o o o o ABOUT GTF India s first International Factoring Company RBI has accorded registration and Authorised

More information

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES Minaxi Rani Assistant Professor (Extn.), Department of Commerce, Govt. College for women P.G. College, Hisar, Haryana, (India) ABSTRACT

More information

Factoring. To explain nature, function and types of factoring. To dilate upon modus operandi of factoring.

Factoring. To explain nature, function and types of factoring. To dilate upon modus operandi of factoring. Learning Objectives: Factoring To explain nature, function and types of factoring. To dilate upon modus operandi of factoring. To bring out potentiality of factoring as a source of finance. To highlight

More information

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org NATURE OF FACTORING www.factors-chain.com/home www.factoring.org A US DEFINITION: a continuing arrangement between a factoring concern and the seller of goods or services on open account, pursuant to which

More information

International Sales Finance Solutions

International Sales Finance Solutions International Sales Finance Solutions Global Transaction Services Cash Management Trade Services and Finance Securities Services Fund Services International Sales Finance Solutions Financing Tools to Support

More information

To enable highly rated corporate borrowers to diversify their sources of short term borrowings.

To enable highly rated corporate borrowers to diversify their sources of short term borrowings. COMMERCIAL PAPER (CP) CP is an unsecured money market instrument issued in the form of a Promissory Note and was introduced in 1990. Can now be issued in Dematerialised form. To enable highly rated corporate

More information

Outstanding Loans Received From Abroad by Private Sector. Definitions and Explanations. Statistics Department Balance of Payments Division

Outstanding Loans Received From Abroad by Private Sector. Definitions and Explanations. Statistics Department Balance of Payments Division Outstanding Loans Received From Abroad by Private Sector Definitions and Explanations Statistics Department Balance of Payments Division Contents I- Definitions... 3 II- Compilation Of The External Debt

More information

Factoring and Forfaiting

Factoring and Forfaiting Factoring and Forfaiting Chapter XII Factoring and Forfaiting After reading this chapter, you will be conversant with: The Concept and Mechanics of Factoring and Forfaiting Different Types of Factoring

More information

FACTORING IMPROVE YOUR CASH FLOW & SECURE YOUR DEBTS. Presented by Gregory Bernardi

FACTORING IMPROVE YOUR CASH FLOW & SECURE YOUR DEBTS. Presented by Gregory Bernardi FACTORING IMPROVE YOUR CASH FLOW & SECURE YOUR DEBTS Presented by Gregory Bernardi FACTORING AGENDA What is factoring? How does it Work? Who can use factoring? Advantages/Benefits How much does it cost?

More information

MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE

MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE Export Forum 2015 October 14, 2015 MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE Presented by: George Babeu, President One Source Risk Management and Funding, Inc. WHAT WE WILL DISCUSS Today s volatile

More information

FACTORING AND FORFEITING. the faster way to get your money

FACTORING AND FORFEITING. the faster way to get your money FACTORING AND FORFEITING the faster way to get your money 3 CONTENTS FACTORING 4 DOMESTIC FACTORING 5 1. Supplier s factoring (Reverse factoring) 5 2. Selective factoring with right of recourse 6 3. Individual

More information

Legal Updates. Legal Issues on factoring business in India. Nidhi Bothra nidhi@vinodkothari.com. Vinod Kothari & Company

Legal Updates. Legal Issues on factoring business in India. Nidhi Bothra nidhi@vinodkothari.com. Vinod Kothari & Company Vinod Kothari & Company Legal Issues on factoring business in India Nidhi Bothra nidhi@vinodkothari.com Vinod Kothari & Company Credit Factoring or simply factoring is an asset backed means of financing

More information

INFORMATION SHEET ON FACTORING (PURCHASE and MANAGEMENT OF ENTERPRISE S ACCOUNT RECEIVABLES) (update in force as from 01 07 2015)

INFORMATION SHEET ON FACTORING (PURCHASE and MANAGEMENT OF ENTERPRISE S ACCOUNT RECEIVABLES) (update in force as from 01 07 2015) INFORMATION SHEET ON FACTORING (PURCHASE and MANAGEMENT OF ENTERPRISE S ACCOUNT RECEIVABLES) (update in force as from 01 07 2015) INFORMATION ON THE BANK Banca IFIS S.p.A. Registered office: Via Terraglio

More information

Arte Bunkering OÜ Annual Report 2014

Arte Bunkering OÜ Annual Report 2014 ANNUAL REPORT 2014 Contents Management report 3 Annual accounts 4 Balance sheet 4 Income statement 5 Cash flow statement 6 Statement of changes in owner s equity 7 Notes to annual accounts 8 Note 1. Accounting

More information

ACCOUNTING AND FINANCIAL MANAGEMENT POLICY

ACCOUNTING AND FINANCIAL MANAGEMENT POLICY ACCOUNTING AND FINANCIAL MANAGEMENT POLICY Document data Document type: Rule/Policy/Plan/Guidelines/Operating Procedures Administering entity: Administration & Finance Manager Date approved: April 2009

More information

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS APPROVED by Resolution No. 11 of 27 October 2004 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS

More information

Optimizing Payment Cycles for Trade Payables and Receivables

Optimizing Payment Cycles for Trade Payables and Receivables Optimizing Payment Cycles for Trade Payables and Receivables Houston Treasury Management Association Space City Cash Conference September 2013 Madeline Sprague, HSBC Bank USA, N.A. Global Trade & Receivables

More information

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384 Model Answer M.Com IV Semester Financial market and financial services Paper code- AS 2384 1. (I) Money Market is a market for short term loans or financial assets. As the name implies it does not deal

More information

FACTORING. Net Advantage of factoring = Rs.(2,15,753 2,00,000) = Rs.15,753 Decision: As there is net savings, factoring is preferable.

FACTORING. Net Advantage of factoring = Rs.(2,15,753 2,00,000) = Rs.15,753 Decision: As there is net savings, factoring is preferable. FACTORING Pen Pusher FACT1 A company is considering engaging a factor. The following information is available: a) The current average collection period for the company s debtor is 80 days. ½% of debtors

More information

1. Whatis Export Credit Insurance? 2. Structured Trade Credit Solutions for the Value Chain. 4. Benefits to Exporters

1. Whatis Export Credit Insurance? 2. Structured Trade Credit Solutions for the Value Chain. 4. Benefits to Exporters Export credit risk solutions Re-defining the way exporters trade successfully 1. Whatis Export Credit Insurance? 2. Structured Trade Credit Solutions for the Value Chain 3. Products & Services available

More information

Unlocking cash in your supply chain

Unlocking cash in your supply chain Unlocking cash in your supply chain Rabo Supplier Finance Supplier Finance 1 Supplier Finance Improved stability in the supply chain 2 Supplier Finance process Four steps to Supplier Finance 3 Supplier

More information

Financing international transactions. International financial settlements 120881-1165

Financing international transactions. International financial settlements 120881-1165 Financing international transactions 1 Lecture outline Overview of the financing methods Exercises 2 Mode of payment vs. financing trade The mode of payment refers to terms of technical transferring the

More information

First column=preferred terms. Bold and italics signifies other defined terms. Bold signifies alternate terms used.

First column=preferred terms. Bold and italics signifies other defined terms. Bold signifies alternate terms used. First column=preferred terms. Bold and italics signifies other defined terms. Bold signifies alternate terms used. 1= Governance; 2=Facilities and Products; 3 Charges; 4 Legal terms and security arrangements;

More information

EUF STATISTICS. 31 December 2013

EUF STATISTICS. 31 December 2013 . ESTIMATES OF EU TURNOVER VOLUMES. Turnover volumes by product, allocation and notification (Estimates of EU s, Millions of ) Estimate of the EU % on Turnover Significance of the sample on total turnover

More information

Factoring in the 21st Century

Factoring in the 21st Century Factoring in the 21st Century The economic relevance of factoring and trade finance in Europe May 2013 1. What is factoring? 2. Who are factoring clients? 3. European factoring market and future trends

More information

Contents. Why is export finance needed? What types of export finance are available? Which currencies can be borrowed? How are risks managed?

Contents. Why is export finance needed? What types of export finance are available? Which currencies can be borrowed? How are risks managed? Contents Why is export finance needed? What types of export finance are available? Which currencies can be borrowed? How are risks managed? What terms of interest apply? Is state-supported financing a

More information

salesinvoices@leaseinvestment.com www.leaseinvestment.com Tel: +44871 237 4770 Fax: +44701 423 7002

salesinvoices@leaseinvestment.com www.leaseinvestment.com Tel: +44871 237 4770 Fax: +44701 423 7002 INVOICE DISCOUNTING, FACTORING & SALES LEDGER MANAGEMENT Selling your sales Invoices or outsourcing your sales ledger is one of the most complex techniques for business finance. Unfortunately, it is often

More information

UK Export Finance Main Features of the Export Refinancing Facility:

UK Export Finance Main Features of the Export Refinancing Facility: UK Export Finance Main Features of the Export Refinancing Facility: Main Features of the Export Refinancing Facility (ERF) Summary UK Export Finance s Export Refinancing Facility (ERF) will help overseas

More information

NOTES TO THE FINANCIAL STATEMENTS AS OF 31 DECEMBER 2006

NOTES TO THE FINANCIAL STATEMENTS AS OF 31 DECEMBER 2006 NOTES TO THE FINANCIAL STATEMENTS AS OF 31 DECEMBER 2006 (Amounts expressed in Euro ) (Translation of a report originally issued in Portuguese Note 49) Operations BNP Factor Companhia Internacional de

More information

How to handle Factoring in your Sage BusinessWorks

How to handle Factoring in your Sage BusinessWorks How to handle Factoring in your Sage BusinessWorks Generally, factoring is a way for a business to receive immediate cash for their accounts receivables by selling invoices to a factoring company. The

More information

Intermediate Accounting

Intermediate Accounting Intermediate Accounting Thomas H. Beechy Schulich School of Business, York University Joan E. D. Conrod Faculty of Management, Dalhousie University PowerPoint slides by: Bruce W. MacLean, Faculty of Management,

More information

Marketing Consultancy Division (MCD) Export Consultancy Unit (ECU) Export in Focus. Jumada Awal, 1428 (May, 2007)

Marketing Consultancy Division (MCD) Export Consultancy Unit (ECU) Export in Focus. Jumada Awal, 1428 (May, 2007) Marketing Consultancy Division (MCD) Export Consultancy Unit (ECU) Export in Focus Factoring & Forfaiting Jumada Awal, 1428 (May, 2007) 1 Factoring & Forfaiting While the business opportunities associated

More information

Derecognition of Financial Assets and Liabilities

Derecognition of Financial Assets and Liabilities FASB MEETING 8 APRIL 2010 SLIDES TO ACCOMPANY AGENDA PAPER 5 International Financial Reporting Standards Derecognition of Financial Assets and Liabilities FASB Educational Session Update on Derecognition

More information

Supply Chain Finance solutions a win-win proposition for Corporate Clients and their suppliers

Supply Chain Finance solutions a win-win proposition for Corporate Clients and their suppliers Supply Chain Finance solutions a win-win proposition for Corporate Clients and their suppliers Prague, 30.10.2014 Page Agenda 1 2 Introduction Corporate Solutions approach Supply chain finance - an important

More information

CCM Enterprise Business Management Software - Functional Schema

CCM Enterprise Business Management Software - Functional Schema CCM Enterprise Business Management Software - Functional Schema Sales Progressing Business Development SALES SALES Products Planning Supplies Supplies Accounting Operations Stock System Administration

More information

Presentation on Banking & Finance - Exports Prashanth.S.Bhat. Cost Accountant

Presentation on Banking & Finance - Exports Prashanth.S.Bhat. Cost Accountant Presentation on Banking & Finance - Exports Prashanth.S.Bhat Cost Accountant Export Finance & Factoring Services EXPORT FINANCE - PCFC - Post shipment finance - Factoring Services IMPORT FINANCING - Buyer

More information

Customer financing in Brazil Guide for a Finnish SME exporter

Customer financing in Brazil Guide for a Finnish SME exporter Customer financing in Brazil Guide for a Finnish SME exporter Contents Financial markets 2 Know your customer 3 Prepayments received from the buyer 4 Granting payment terms with invoice 5 Bills of exchange

More information

EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION (in thousands, except per share data) (unaudited)

EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION (in thousands, except per share data) (unaudited) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION (in thousands, except per share data) Recurring revenues $ 314,727 $ 282,117 $ 216,517 $ 834,080 $ 610,384 Non-recurring revenues 15,620

More information

Understanding Invoice Finance

Understanding Invoice Finance Understanding Invoice Finance Introduction John Mackey Senior Business Development Manager Ronan Horgan Managing Director Content What is Invoice Finance? Industry Background Who can avail of Invoice Finance?

More information

Index. call options 102 cap and floor options 103 capital goods 125 capital markets 145 capital risk 111 cargo insurance 16

Index. call options 102 cap and floor options 103 capital goods 125 capital markets 145 capital risk 111 cargo insurance 16 Index acceptance 50 accessory obligation 71 Act of God 24 advance payment 35 advance payment guarantee 77 adverse business risks 20 advising bank 48, 73 air waybill 43 amendments 55 annuities 150 anti-corruption

More information

BANKING UNIT POLICY DOCUMENTS

BANKING UNIT POLICY DOCUMENTS BANKING UNIT POLICY DOCUMENTS POLICY DOCUMENT ON THE REGULATORY PROVISIONS FOR THE UNDERTAKING OF LENDING ACTIVITIES BY INSTITUTIONS AUTHORISED UNDER THE FINANCIAL INSTITUTIONS ACT 1994 FACTORING FORFAITING

More information

IGAS 3. Cash Flow Statements. Government Accounting Standards Advisory Board. Contents

IGAS 3. Cash Flow Statements. Government Accounting Standards Advisory Board. Contents Cash Flow Statements Government Accounting Standards Advisory Board Contents Description Page Number 1. Introduction 3 2. Objective 3 3. Scope 3 4. Benefits of Cash Flow Information 4 5. Definitions 4

More information

Corporate and Investment Banking. Open Account Trade and Supply Chain Financing Solutions for Sellers

Corporate and Investment Banking. Open Account Trade and Supply Chain Financing Solutions for Sellers Corporate and Investment Banking Open Account Trade and Supply Chain Financing Solutions for Sellers Standard Bank your trade partner in, for and across Africa Open Account Trade and Supply Chain Financing

More information

Methodological Information on Foreign Exchange Assets and Liabilities of Non-Financial Companies Statistics Department

Methodological Information on Foreign Exchange Assets and Liabilities of Non-Financial Companies Statistics Department Methodological Information on Foreign Exchange Assets and Liabilities of Non-Financial Companies Statistics Department Monetary and Financial Statistics Division Contents I- Purpose... 3 II- Definitions...

More information

HOUSE BILL 2242 AN ACT AMENDING TITLE 6, ARIZONA REVISED STATUTES, BY ADDING CHAPTER 16; RELATING TO REVERSE MORTGAGES.

HOUSE BILL 2242 AN ACT AMENDING TITLE 6, ARIZONA REVISED STATUTES, BY ADDING CHAPTER 16; RELATING TO REVERSE MORTGAGES. Senate Engrossed House Bill State of Arizona House of Representatives Forty-ninth Legislature Second Regular Session HOUSE BILL AN ACT AMENDING TITLE, ARIZONA REVISED STATUTES, BY ADDING CHAPTER ; RELATING

More information

AS -11 THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES IPCC PAPER 5 ADVANCED ACCOUNTING CHAPTER 2 CA. ANAND J. BANKA

AS -11 THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES IPCC PAPER 5 ADVANCED ACCOUNTING CHAPTER 2 CA. ANAND J. BANKA AS -11 THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES IPCC PAPER 5 ADVANCED ACCOUNTING CHAPTER 2 CA. ANAND J. BANKA OBJECTIVE An enterprise may carry on activities involving foreign exchange in two ways.

More information

Corporate Services India

Corporate Services India Corporate Services India The One-Stop Solution For All Your Business Needs Business Environment in India Located in south Asia with a population of over 1.2 billion, India is a pluralistic, multilingual,

More information

INTERNATIONAL TRADE FINANCE SERVICES

INTERNATIONAL TRADE FINANCE SERVICES INTERNATIONAL TRADE FINANCE SERVICES DOCUMENTARY LETTERS OF CREDIT A PRACTICAL GUIDE CONTENTS LETTERS OF CREDIT SIMPLY DEFINED.............................................2 BENEFITS OF A LETTER OF CREDIT...............................................3

More information

Cash and Receivables

Cash and Receivables CHAPTER Cash and Receivables Objectives After careful study of this chapter, you will be able to: 1. Identify items of cash (and cash equivalents). 2. Understand the importance of cash management. 3. Discuss

More information

BUSINESS EMPOWERED! Bringing structured Trade Finance Solutions to Corporates and SMEs in the Middle East

BUSINESS EMPOWERED! Bringing structured Trade Finance Solutions to Corporates and SMEs in the Middle East (A member of the FIMBank Group) Regulated by the DFSA BUSINESS EMPOWERED! Bringing structured Trade Finance Solutions to Corporates and SMEs in the Middle East www.menafactors.com Menafactors Limited PO

More information

Study Unit 6. Managing Current Assets

Study Unit 6. Managing Current Assets Study Unit 6 Managing Current Assets SU- 6.1 Working Capital What is working capital and types of capital policies What all is included in working capital? Net working capital = What is used to acquire

More information

Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less. Accounting Fundamentals Lesson 5 5.0 Receivables & Investments Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

More information

EXPORT IMPORT BANK OF TRINIDAD AND TOBAGO

EXPORT IMPORT BANK OF TRINIDAD AND TOBAGO EXPORT IMPORT BANK OF TRINIDAD AND TOBAGO Evolution EXCICO 1973 EXIMBANK 1997 Vision To be the premier trade finance and credit insurance institution facilitating the national export thrust as the country

More information

External Commercial Borrowings

External Commercial Borrowings External Commercial Borrowings Neha Gupta Vinod Kothari & Company 1012 Krishna, 224 AJC Bose Road Kolkata- 7000017 Ph: 91-33-22817715/ 22811276 Email: neha@vinodkothari.com What is ECB? Source of funds

More information

LIST OF CODES FOR FOREIGN EXCHANGE AND OTHER TRANSACTIONS BY NON-RESIDENTS AND RESIDENTS (VO CODES)

LIST OF CODES FOR FOREIGN EXCHANGE AND OTHER TRANSACTIONS BY NON-RESIDENTS AND RESIDENTS (VO CODES) Group Subcode VO Code LIST OF CODES FOR FOREIGN EXCHANGE AND OTHER TRANSACTIONS BY NON-RESIDENTS AND RESIDENTS (VO CODES) Name and description of transaction 01 FX transactions by Residents in the non-cash

More information

RANBAXY EGYPT COMPANY (L.L.C.) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 TOGETHER WITH AUDITOR S REPORT

RANBAXY EGYPT COMPANY (L.L.C.) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 TOGETHER WITH AUDITOR S REPORT FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 TOGETHER WITH AUDITOR S REPORT Translation of Auditor s report AUDITOR S REPORT TO THE SHAREHOLDERS OF Report on the Financial Statements We have audited

More information

Transport Insurance for International trade

Transport Insurance for International trade Transport Insurance for International trade 1) International trade insurance indemnifies importers and exporters against various types of losses, including damage to goods in transit, products injuring

More information

AGENDA ITEM XI: CONSUMER CREDIT

AGENDA ITEM XI: CONSUMER CREDIT SCREENING CHAPTER 28 Country Session: LEGAL BASIS LAW NO. 4077 ON CONSUMER PROTECTION AMENDED BY LAW NO. 4822 (OG No: 25048, 14 March 2003) Came into force on 14 June 2003 BY-LAW ON RULES AND PROCEDURES

More information

Treasury Operations of Islamic Banks

Treasury Operations of Islamic Banks CHAPTER 26 Treasury Operations of Islamic Banks Introduction The world s financial markets are now taking serious notice of the tremendous growth of Islamic banking in the international markets. This can

More information

Invoice Factoring, Debtors Discounting and Trade Finance are bridging facilities using your debtors, stock or movable assets to raise cash.

Invoice Factoring, Debtors Discounting and Trade Finance are bridging facilities using your debtors, stock or movable assets to raise cash. Dear Sir / Madam, Re Bridging Facilities Invoice Factoring, Debtors Discounting and Trade Finance are bridging facilities using your debtors, stock or movable assets to raise cash. A key element is that

More information

Chapter 18 Working Capital Management

Chapter 18 Working Capital Management Chapter 18 Working Capital Management Slide Contents Learning Objectives Principles Used in This Chapter 1. Working Capital Management and the Risk- Return Tradeoff 2. Working Capital Policy 3. Operating

More information

Principles of Banking Module A

Principles of Banking Module A Principles of Banking Module A V. Rajendran Venkrajen.in venkrajen@yahoo.com Indian Financial System Financial Market consists of Money market, debt market, forex market, capital market Debt market ->

More information

PRINCIPLES FOR PRODUCING AND SUBMITTING REPORTS

PRINCIPLES FOR PRODUCING AND SUBMITTING REPORTS December 2014 PRINCIPLES FOR PRODUCING AND SUBMITTING REPORTS (1) The balance sheet and income statement are in euros, rounded up to integers. Amounts recorded in foreign currencies must be converted into

More information

Factoring Business in India: Beyond Banking

Factoring Business in India: Beyond Banking CORPORATE LAW RESEARCH GROUP Factoring Business in India: Beyond Banking CORPORATE IN-FOCUS A Note on Banking Business in India Note: This research report is a product of the research conducted at Corporate

More information

Schemes for Financing Micro, Small and Medium Enterprises

Schemes for Financing Micro, Small and Medium Enterprises Schemes for Financing Micro, Small and Medium Enterprises Background The Small Scale Industries Sector, redefined since 2006 as the Micro Small and Medium Enterprises Sector has played a seminal role in

More information

To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) of dated the 2 nd April, 2012

To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) of dated the 2 nd April, 2012 To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) of dated the 2 nd April, 2012 Government of India Ministry of Finance (Department of Financial Services) Notification

More information

Online International Interdisciplinary Research Journal, {Bi-Monthly}, ISSN2249-9598, Volume-IV, Issue-V, Sept-Oct 2014

Online International Interdisciplinary Research Journal, {Bi-Monthly}, ISSN2249-9598, Volume-IV, Issue-V, Sept-Oct 2014 Factoring and Forfaiting- Novel Financial Tools (A Boon for Financing Receivables in Domestic and International Trade) Krishnarao L Ukey Advisor to SMEs & Professional Colleges Nagpur, Maharashtra, India

More information

Export Transactions. Finance and Risk

Export Transactions. Finance and Risk Export Transactions Finance and Risk Table of Contents Export Finance Export Finance Methods Pre-Export Export Finance Methods Post-Export Structured Commodity Finance Export Risk Forms of Export Risk

More information

practical information

practical information practical information hermes cover special Refinancing of officially supported export receivables march 2012 practical information hermes cover special Refinancing of officially supported export receivables

More information

Copyright 1999 Ian H. Giddy Managing Credit Risks 3 SELL ASSETS (MAY ADD MORE) Copyright 1999 Ian H. Giddy Managing Credit Risks 5

Copyright 1999 Ian H. Giddy Managing Credit Risks 3 SELL ASSETS (MAY ADD MORE) Copyright 1999 Ian H. Giddy Managing Credit Risks 5 Managing the Credit Risks/1 Asset-Backed Securities Managing the Credit Risks Managing the Risks Identifying the risks The role of rating agencies Managing the credit risks Managing the sovereign risks

More information

The updated list of most used VO codes.

The updated list of most used VO codes. The updated list of most used VO codes. VO code Type of operation 02 FX transactions 02 010 Purchase of RUB currency by non-resident 02 020 Selling of RUB currency by non-resident 10 Settlements for goods,

More information

Chapter Sources of Short-Term Financing

Chapter Sources of Short-Term Financing Chapter Sources of Short-Term Financing Chapter 8 - Outline PPT 8-2 Sources of Short-Term Financing Trade Credit from Suppliers Net Credit Position Chartered Banks in Canada Types of Short-term Loans Interest

More information

CHAPTER 20 INTERNATIONAL TRADE FINANCE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS

CHAPTER 20 INTERNATIONAL TRADE FINANCE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS CHAPTER 20 INTERNATIONAL TRADE FINANCE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1. Discuss some of the reasons why international trade is more difficult and risky

More information

FOREIGN EXCHANGE RISK MANAGEMENT

FOREIGN EXCHANGE RISK MANAGEMENT CHAPTER - VII CHAPTER - VII FOREIGN EXCHANGE RISK MANAGEMENT INTRODUCTION DEFINITION & MEANING EXPOSURE IN FOREIGN EXCHANGE > TRANSACTION EXPOSURES > TRANSLATION EXPOSURES > OPERATING EXPOSURES MANAGING

More information

Regional Workshop: Factoring/Receivable Discounting: a financing tool for agriculture sector Barbados, Savannah Hotel - 4-5 Nov 09

Regional Workshop: Factoring/Receivable Discounting: a financing tool for agriculture sector Barbados, Savannah Hotel - 4-5 Nov 09 Regional Workshop: Factoring/Receivable Discounting: a financing tool for agriculture sector Barbados, Savannah Hotel - 4-5 Nov 09 Workshop report and recommendations The workshop brought together about

More information

INR Volatility - Hedging Options & Effective Strategies

INR Volatility - Hedging Options & Effective Strategies INR Volatility - Hedging Options & Effective Strategies The purpose of the article is to draw attention on the recent volatility in Indian Rupee, various hedging options and effective hedging strategies.

More information

Financial Assets, Liabilities and Commitments

Financial Assets, Liabilities and Commitments Financial Assets, Liabilities and Commitments Policy Statement Ref: A52923, 5.0 1 of 10 Policy name: Financial Assets, Liabilities and Commitments Policy number: Finance Key result areas: Finance Branch:

More information

LIST of Currency and Other Operations Performed by Residents and Non-Residents

LIST of Currency and Other Operations Performed by Residents and Non-Residents Annex 2 To Instruction of the Bank of Russia No.138-I as of 04 June 2012 On procedure for residents and non-residents to provide authorised banks with documentation and information concerning currency

More information

½ a mark for rounding up (6 marks) (b) There are a number of costs to the business associated with holding inventory:

½ a mark for rounding up (6 marks) (b) There are a number of costs to the business associated with holding inventory: EDI LCCI IQ ON DEMAND AWARD IN BUSINESS FINANCE AND BANKING OPERATIONS SAMPLE LEVEL 4 MARKING SCHEME DISTINCTION MARK 75% CREDIT MARK 60% PASS MARK 50% TOTAL 100 MARKS QUESTION 1 (a) Inventory days Receivable

More information

INTERACTIVE BROKERS DISCLOSURE STATEMENT FOR BOND TRADING

INTERACTIVE BROKERS DISCLOSURE STATEMENT FOR BOND TRADING INTERACTIVE BROKERS DISCLOSURE STATEMENT FOR BOND TRADING THIS DISCLOSURE STATEMENT DISCUSSES THE CHARACTERISTICS AND RISKS OF TRADING BONDS THROUGH INTERACTIVE BROKERS (IB). BEFORE TRADING BONDS YOU SHOULD

More information

Emirates NBD Trade Finance Tariff Effective 22.06.2011 IMPORTS

Emirates NBD Trade Finance Tariff Effective 22.06.2011 IMPORTS Emirates NBD Trade Finance Tariff Effective 22.06.2011 IMPORTS DC Issuance Commission Standard Irrevocable DC First AED 100,000 0.125 % per month(minimum 3 months) Remaining DC value 0.0625 % per month(minimum

More information

128 SU 3: Financial Accounting I

128 SU 3: Financial Accounting I 128 SU 3: Financial Accounting I 3.5 FINANCIAL ASSETS AND LIABILITIES Definitions 1. Financial assets include cash, equity instruments of other entities (e.g., preference shares), contract rights to receive

More information

WELCOME! Introduction. Celebrating. &PrimeRevenue. PrimeRevenue Hong Kong. 2012 PrimeRevenue, Inc.

WELCOME! Introduction. Celebrating. &PrimeRevenue. PrimeRevenue Hong Kong. 2012 PrimeRevenue, Inc. WELCOME! Introduction Celebrating Ethe Factor Network establishment of &PrimeRevenue PrimeRevenue Hong Kong 2012 PrimeRevenue, Inc. Global Reach Today, we transact business in 50 countries Our platform

More information

FEES FOR THE SERVICES OF PRIMORSKA BANKA D.D.RIJEKA NUM. TYPE OF SERVICE FEE

FEES FOR THE SERVICES OF PRIMORSKA BANKA D.D.RIJEKA NUM. TYPE OF SERVICE FEE FEES FOR THE SERVICES OF PRIMORSKA BANKA D.D.RIJEKA A TRANSACTIONS WITH RESIDENT CORPORATE CLIENTS I DOMESTIC PAYMENT TRANSACTIONS NUM. TYPE OF SERVICE FEE 1. ACCOUNT REGISTRY SERVICES 1.1. Account opening

More information

Your Partner in International Trade, Investment & Structured Finance. Aon Trade Credit Asia

Your Partner in International Trade, Investment & Structured Finance. Aon Trade Credit Asia Your Partner in International Trade, Investment & Structured Finance The ever-changing financial and political landscape makes it impossible to predict the future. Our culture encourages us to aggressively

More information