India Factoring & Financial Solutions plans to foray into export factoring business

KOLKATA: India Factoring & Financial Solutions Pvt Ltd, a joint venture between Punjab National Bank and FIMBank (Malta), plans to start export factoring in the next six months. It has received the necessary licence from Reserve Bank of India in January to enter this business segment.

""Export factoring is a much more complex business. We have to establish linkages with counterparties overseas,"" the company chief executive Sudeb Sarbadhikary said on Thursday.

The company has already become a member of International Factors Group, a Brussels-based association for international factors. It plans to become a member of Amsterderm-based Factors Chain International too.

Export factoring is financing exporters against their short-term foreign currency receivables.

FIMBank is the largest shareholder of India Factoring & Financial Solutions with a 49% stake, while PNB holds 30%. Other shareholders include Italy's Banca IFIS (10%), employees trust (10%) and Mumbai-based Blend Financial Services (1%).

The company started its business in October 2010 with Rs 100 crore initial capital. Sarbadhikary said its turnover is now close to Rs 3,000 crore as against Rs 300 crore as on March 2011.

The Mumbai-based entity has recently opened offices in Kolkata and Ahmedabad. It has offices also in New Delhi, Chennai, Bangalore and Hyderabad.