While foreign banks eye `factoring' as the future finance product for India, corporates operating in this space for the last 13 years are not quite so upbeat about the prospects, despite sensing the potential.
"The industry has been moving at a snail's pace since inception. This is basically because there is no legal framework to protect factoring services," laments B. Sukumaran, Managing Director, Canbank Factors Ltd.
In an interview with Business Line, Mr. Sukumaran expanded his views.
What in your perception has been the stumbling block for growth?
First of all, we don't have a legal framework to protect factoring services. The Bill was drafted six years back but is yet to see the light of the day.
We need legal protection because all our advances are `clean advances'. We take an undertaking from the buyer and make the prepayment.
