New Delhi: Rajya Sabha passed the Factoring Regulation (Amendment) Bill, 2021 without discussion amid the Opposition's ruckus. The Bill was passed through a voice vote on Thursday and the House was adjourned for the day.
Finance Minister Nirmala Sitharaman said about 9,000 Non-Banking Financial Institution (NBFC) access would be made available to Micro, Small and Medium Enterprises (MSMEs), increasing from the seven NBFCs available to them.
It should be noted that this is the third Bill passed in the Upper House without discussion. Meanwhile, Opposition MPs continued sloganeering. Some of the MPs ventured into the Well of the House holding placards saying 'Big Brother is Watching', 'Stop Snooping', 'We are not terrorist' amid proceedings. Opposition parties have been pressing upon issues including Pegasus snooping row, farm laws, Covid crisis since the commencement of the Monsoon Session.
The Factoring Regulation Act, 2011 was enacted for regulating the assignment of receivables to factors, registration of factors carrying on factoring business and the rights and obligations of parties to the contract for assignment of receivables. Factoring is a transaction where a business entity sells its receivables from a customer to a third party which is a 'factor' for the immediate realisation of funds either in part or in full.
It may include invoice discounting, recourse factoring, non-recourse factoring, collections and reverse factoring. International factoring includes export factoring, import factoring, export invoice discounting and reverse factoring. The bill seeks to widen the scope of entities that can engage in the factoring business.
The Factoring Regulation (Amendment) Bill, 2020, was introduced in the Lok Sabha on September 24, 2020, with a view to liberalise the restrictive provisions in the Act and at the same time ensure that a strong regulatory/oversight mechanism is put in place through the RBI.
(with agency inputs)
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