Financial Daily from THE HINDU group of publications
Thursday, Apr 10, 2003
Financial Daily from THE HINDU group of publications Thursday, Apr 10, 2003 |
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Money & Banking
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Financial Institutions GTF eyes domestic factoring Our Bureau
MUMBAI, April 9 GLOBAL Trade Finance Pvt Ltd (GTF), receivables management and export-financing company promoted by Exim Bank of India, WestLB of Germany and IFC, Washington, today said it would explore opportunities in the Rs 7,000-crore domestic factoring business. GTF, which has made a net profit of Rs 1.32 crore on a turnover of Rs 500 crore during 2002-03, said it would enter the domestic receivables management business currently dominated by SBI Factors and Canbank Factors. GTF has an 80 per cent share of the $100 million export factoring business, Mr T.C. Venkat Subramanian, Chairman of GTF, told newspersons here. According to Ms Veena Mankar, Managing Director, GTF, the company would raise about Rs 300 crore in the current year to finance exporters. GTF is targeting revenue of Rs 750-800 crore in the current year from factored bills. Mr Subramanian said GTF along with the four other factors - Foremost Factors, Integrated Finance Company, SBI Factors, and Canbank Factors - was planning to form an association to press for using the Securitisation Act. Currently, only commercial and co-operative banks were allowed to use the Securitisation Act for making recoveries, he said. Ms Mankar said since the charge on receivables was not registered anywhere at present, should a default were to happen, factoring companies might get into a dispute with banks that also finance the same exports. "It is difficult at present to fix the charge on any receivables. Since banks also finance exporters and do it on a hypothecation basis, a floating charge is created on the receivables. In the case of a dispute, it would become difficult to fix the lien and factoring companies may end up as unsecured creditors," she said. Factoring companies would represent to the Government in this regard, she added.
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