How To File A Case Under The Factoring Regulation Act?

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The Factoring Regulation Act 2023 amends the original Factoring Regulation Act of 2011, expanding the scope for entities engaging in factoring. Its changes include:

It revises definitions of “receivables” and “assignment,” allowing broader interpretations for financial transactions.
Regulators have removed specific thresholds for non-banking financial companies (NBFCs) to engage in factoring
The Reserve Bank of India is empowered to set regulations for registration and transaction details, enhancing oversight.

How To Register A Factor Under The This Act?

To register as a factor under the Factoring Regulation Act, follow these steps:

Ensure your entity qualifies as a factor, typically as a non-banking financial company (NBFC) or similar corporate structure.
Submit an application for registration to the Reserve Bank of India (RBI) in the prescribed format.
Provide necessary documentation, including compliance with NBFC registration requirements under the RBI Act, 1934.
Pay any applicable fees as specified by the RBI.
Continue operations until you receive the certificate of registration or notice of rejection from the RBI.

How To File A Case Under The Factoring Regulation Act?

To file a case under this Act, follow these steps:

Register your business as a factor with the Reserve Bank of India (RBI) by using the prescribed application form.

File particulars of every assignment of receivables with the Central Registry established under the SARFAESI Act within the specified time frame (as per recent amendments, this timeframe is flexible).
Prepare necessary documentation, including agreements and disclosures regarding any defences or rights of set-off available to debtors.
Pay applicable fees for registration and filing transactions.
Adhere to all RBI directives and regulations concerning factoring practices.

Also Read  Section 27 - Bharatiya Nagarik Suraksha Sanhita(BNSS) - Powers Of Officers Appointed
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