Factoring

Factoring It is a continuing arrangement between a financial institution, the factor, and a business concern, the client, selling goods or services to trade customers, whereby the factor buys the client’s book debts, i.e., ACCOUNTS RECEIVABL, either with or without recourse to the client, and controls the credit extended o the customers and administers the sales ledger. The Reserve Bank of India has directed that factoring should be done by banks through separate subsidiaries.

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