The Act has empowered the RBI to make regulations prescribing the manner of grant of certificate of registration and manner of filing of assignment of receivable by TReDS on behalf of the Factors.
In exercise of the powers conferred, the RBI has issued the following regulations:
a) Registration of Factors (Reserve Bank) Regulations, 2022 issued vide Notification dated January 14, 2022 (published in Official Gazette dated January 17, 2022).
b) Registration of Assignment of Receivables (Reserve Bank) Regulations, 2022 issued vide Notification dated January 14, 2022 (published in Official Gazette dated January 17, 2022).
As per the above regulations, all existing NBFC-ICCs (non-deposit taking NBFC-Investment and Credit Companies) with asset size of ₹1,000 crore & above will be permitted to undertake factoring business subject to satisfaction of certain conditions.
Other NBFC-ICCs can also undertake factoring business by registering as NBFC-Factor. Eligible companies may apply to the Reserve Bank for seeking registration under the Act.
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