Canbank Factors, India’s largest independent factor by market share, is planning to offer import factoring in the country, as a cheaper alternative to letters of credit (L/C).
Canbank claims it can provide import factoring services in India up to 75 basis points lower than the premium charged for opening L/Cs.
“Import factoring is cheaper than operating through the conventional letter of credit and is emerging as the preferred choice of financing global trade, particularly one that involves European sellers,” the factor said in a statement this week.
Canbank says the usual cost for opening an L/C is a round 1-2 per cent, whereas the charges levied for import factoring are 0.75-1 percent. Canbank will be seeking approval from its board for the service and will then file an application with the Reserve Bank of India (RBI).
Source: BCR
