Factoring Services in ICICI Bank

Factoring Overview

• It started in Ancient Rome, there manufacturers and merchants used Factor

• To administer the sales

• Period of Colonization

• Grew rapidly in the United States, as there was a significant demand for European

merchandise

Factoring services included

• Taking physical possession of the goods

• Storing them

• Finding buyers and delivering the goods to them

• Collecting payment from the buyers

Today , factoring is being offered as a valuable financial product major financial

institutions and banks.

The Factoring Regulation Act

• The Factoring Regulation Act, 2011

• In India 23 January, 2012 wherein provisions are made

• Registration and obligations of parties to contract for

assignment of receivables.

Silent Features of the Factoring Regulation Act, 2011:

• provides for rights and interests under present and future receivables

• lays down rights and obligation of various parties to a contract for

assignment of receivables

• Relationship

• special provisions for small or micro enterprise Assignors

FACTORING IN ICICI BANK

• ICICI bank's factoring performs an important trade finance.

• Flexible financial solution

• Factoring relies on the financial strength, creditworthiness of customers.

• Improves customers cash flow

• Improves customers credit rating

• Reduces customers credit risk

• Efficient management of customers receivables

SERVICES

• Domestic factoring - discounting of non-LC backed domestic invoices/ bills

• Export factoring - discounting of non-LC backed export invoices/bills

TRADE SERVICES

• Offers a wide range of trade services designed to meet a range of short term to medium term trade

financing requirements,

• that your company can seize new business opportunities whenever they arise.

• Customers can benefit from our streamlined processes based on a sound technological backbone

• designed to provide best in class service levels, and reduce the hassles associated with trade

transactions.

• Whether you are an importer or exporter, our correspondent network of over 381 foreign banks

across 57 countries,

• foreign currency Nostro accounts in more than 30 currencies, will ensure that we meet almost all

your international trade requirements.

IMPORT AND EXPORT

IMPORTS

• Letter of Credit

• A Letter of Credit (LC) is a written undertaking issued by a bank on behalf of its customer in favour

of the beneficiary to pay a certain sum of money against presentation of stipulated set of documents

that comply with the terms of the LC.

• the creditworthiness of the bank replaces that of the customer.

• amends and pays sight and usance letters of credit.

• Customers can benefit from our expertise in structuring the instruments in the best manner.

• Import Bill Collections

• Documentary Collections are a common and flexible mode of payment for goods purchased from

domestic or overseas suppliers.

CONTINUE…

• It involves handling of documents by bank in accordance with the collection instruction

received from remitting bank.

• Customers can rely on our expertise in efficient and prompt handling of Import collection

documents.

• Trade Credit

• Trade Credit is an essential tool for financing your imports.

• address your working capital gap through import financing solutions in foreign currency

through Buyers/ Suppliers Credit at competitive rates.

EXPORTS

• Export Finance

• Avail ICICI Bank's export finance services to facilitate cash flow in your business.

• export finance is available both in Indian rupees and foreign currency duly tailor-made to

support your business requirements.

• ICICI Bank's export finance services include both pre-shipment and post-shipment credit.

• Obtain pre-shipment finance in the form of Export Packing Credit to finance purchase or

import of raw materials and processing and packing of goods for export.

• Post-shipment credit finances export sales receivables after you have shipped the goods until

the export proceeds are realised.

CONTINUE…

• The ICICI Bank Edge

• Competitively priced

• Quick turnaround time

• Export Pre-shipment Finance

• We provide pre-shipment finance in the form of Export Packing Credit (EPC) to help you to

meet your working capital needs while manufacturing your goods for export.

• We provide Export Packing Credit both in rupee as well as foreign currency at competitive

rates.

CONTINUE…• Export LC Advising

• Benefit from timely receipt, expert advice and a wide international network when your Export Letter

of Credits are advised through ICICI Bank.

• Export Letter Of Credit Confirmation

• Benefit from the credit strength of ICICI Bank for confirmation of your export Letters of Credit

received from foreign banks.

• With ICICI Bank's confirmation services, you can eliminate the foreign bank risk and country risks

from your export transaction.

• Once we add our confirmation to the Letter of Credit, you are assured of payment, subject to non-

discrepant documents, irrespective of non-payment by LC opening bank.

CONTINUE…

• Export Bill Negotiation

• We negotiate your export bills drawn under Letter of Credit, if the documents are found to be strictly in

terms with the Letter of Credit conditions.

• We offer this at competitive rates both in rupee as well as foreign currency with world-class service

standards.

• Negotiation under LC is much simpler than availing regular working capital limits from a bank.

• Purchase/Discounting of Export Bills

• Do not worry when your exports are not covered under Letter of credit.

• Against sanctioned credit limits, we can pay you the discounted value of your invoice, immediately on

shipment.

CONTINUE…

• We offer this at competitive rates both in rupee as well as foreign currency and with world-

class service standards.

• Export Bill Collection

• Concentrating your Documentary Collection activities with ICICI Bank, you can eliminate

many of your exporting hassles.

• Not only will your international banking become much more uniform,

• you can experience fewer delays in receiving payment,

• effortlessly access collection information details,

• gain increased control over export receivables and have an efficient cash flow management.

DIRECT EXPORT FACTORING

GUARANTEES

• While entering into a large-scale business transaction or

• carrying out a high-value project, a company is often required to submit a Bank Guarantee.

• In an increasingly challenging business environment,

• a bank guarantee is an effective way of securing performance and payment.

• We provide world-class bank guarantee services and in this way also assure your clients of

your strong commitment.

CONTINUE…

• Some of the variants of guarantees offered include:

• Performance Guarantees

• Financial Guarantees

• Bid Bond Guarantees

• Advance Payment Guarantees

• Deferred Payment Guarantees

INLAND TRADE

• ICICI Bank offers comprehensive range of inland trade services.

• From financing your suppliers/vendors to the financing of your dealers,

• we structure and customise solutions suited to your specific business requirements.

• Inland Letter of Credit Issuance

• issue Inland Letter of Credit on your behalf that gives you the advantage with your suppliers.

• experts advise you in drafting the Letter of Credit terms and conditions so as to protect your

interests.

CONTINUE…

• Inland Bill Discounting (Under Letter of Credit)

• provide finance by discounting your inland bills drawn under letters of credit,

• if the documents are found to be strictly in terms with Letter of Credit conditions and on

receipt of acceptance from the Letter of Credit issuing bank.

• at competitive rates and maintain the best service standards at all times.

• Inland Bill Discounting (Not under Letter of Credit)

• We provide financing for your bills drawn on documents against acceptance terms, to the

extent of your sanctioned credit limits to help improve your cash flows.

CONTINUE…

• Bills for Collection

• By routing your inland bills through ICICI Bank, you experience fewer delays in receiving

payments,

• receive customised MIS that is integrated to your ERP systems,

• gain increased control over your trade receivables and efficient cash flow management.

REMITTANCES

• Inward Remittance - Wire Transfer Instructions

• ICICI Bank's Wire Transfer Instructions is one of the easiest methods of receiving money to

your business account in India.

• select the currency in which the remittance is intended to be received,

• fill in your 12 digit current account number and brief details of remittance and

• forward the wire transfer instructions to your overseas business partner in getting the

remittance.

• remember to advice your overseas partner to send instructions to their Bank with "OUR" in

their charges column when they send the wire transfer.

CONTINUE…

• From the time you place the funds transfer request with your local bank, it takes 24-48 banking

hours for the funds to reach our account held with our correspondent bank.

• The Wire transfer will be processed and the money will be transferred to your beneficiary

account in 2 hours time

• Outward Remittance

• Whether remittance is towards royalty payment or dividend pay-outs, agency commission, ECB

repayments, etc.

• you can rely on ICICI Bank for accurate and timely payment to the beneficiary.

• Subject to prevailing regulations, with ICICI Bank's state-of-the-art technology and SWIFT tie-

ups outward remittance is only a click away.

CONCLUSION

• The concept of an Agent or Factor is spread rapidly across the world.

• Today factoring is being offered as a valuable financial product among major financial

institutions and banks.

• ICICI bank's factoring performs important trade finance.

• A wide range of trade services designed to meet a range of short term to medium term trade

financing requirements.

• ICICI bank guarantee is an effective way of securing performance and payment.

THANK YOU