Though financial transactions involved in ‘factoring’ and ‘forfaiting’ appears alike, these two terms are different in their nature, perception and scope. From the below table, let us find out the key difference between factoring and forfaiting; FACTORING FORFAITING Factoring is a financial arrangement whereby a supplier of goods sells its trade receivables to the factor…
International factoring usually has two factors viz. export factor and import factor. The export factor looks at financing the exporter and collection of account receivables. The import factor evaluates the importer in respect of collecting the dues in time and assessment of chances of default by the importer. The exporter on receipt of export order…
The term forfaiting refers to a form of trade finance involving discounting of export bills receivables such as drafts drawn under LC, bills of exchange, promissory notes, or other instruments on without recourse basis. The export of capital goods involves account receivables of medium and long term maturities. It is a general practice that the…
When a company plans to raise money from the public, it needs to provide the offer document (prospectus) containing detailed information about the business and financials of the company including details about its promoters, reason for raising money, how the money will be used, risks involved with investing in the company and so on. The…
Selective credit control means control over bank finance against the security of sensitive commodities. In exercise of powers conferred by Section 21 & 35A of the Banking Regulation Act, 1949, the Reserve Bank of India issues directives to commercial banks from time to time, stipulating specific restrictions on bank advances against specified sensitive commodities. The…
In terms Banking Regulation Act, 1949, RBI provides a framework of the rules, regulations, and instructions with regard to bank lending. Accordingly it has issued following directions to scheduled commercial banks on statutory and other restrictions on loans and advances. A bank cannot grant any loans and advances on the security of its own shares.…
Wholesale banking is popularly known as corporate banking, also known as business banking. Wholesale banking or corporate banking refers to the aspect of banking that deals with corporate customers such as trading houses, multinational companies, exceptionally large domestic industrial and business houses, prime public sector companies etc. The above types of clientele opt for the…
The major difference between wholesale banking and retail banking is in the type of clientele. Retail banking, also known as consumer banking, refers to the offering of banking services to individuals and lower-tier businesses. Services offered in retail banking related both on deposits as well as loans and advances. Deposit products avail retail customers are…
The Co-operative Banks in India are primarily registered as cooperative societies under the provisions of either the State Cooperative Societies Act of the State concerned or the Multi State Cooperative Societies Act, 2002 if the area of operation of the bank extends beyond the boundaries of one state. The banking related functions of Urban Co-operative…
EXIM Bank of India was established by the Government of India in 1982 under the Export-Import Bank of India Act, 1981 for financing, facilitating, and promoting India’s international trade. The bank conducts export market studies and assists Indian Joint ventures in third countries. The bank offers international merchant banking services and financing for overseas investment…