Standard Chartered Bank has concluded a factoring deal worth $25m for Bharat Forge Ltd, a castings and forgings supplier based in India.
Chris Low, chief executive of StanChart India region, remarked that the entire deal was done on a non-recourse basis. StanChart therefore had assumed the credit risk on its books.
Low said that this was the first time that such a large deal was done on a non-recourse basis. Traditionally, discounting of bills by banks has always been done on a “with recourse” basis.
He said that StanChart proposed to expand the factoring business. Moreover, all the factoring business done in India has all been small tickets.
He declined to reveal the customer in whose name the bills were drawn and the discounting rates applicable in this deal.
