Your Cash flow Partner

I cannot bear the risk of delay in payment or non payment.

So, I insist on letter of credit confirmed by a bank in India.

My customers say that they get reasonable credit terms from others without letter of credit.

Either I lose my customer or lose my margins if I insist on Letter of Credit.

Naturally, my exports are down.

Why your Exports are not picking up?

But most of your domestic sales are on open account terms.

Why?• My risk is less here.

• I know my customers well.• I have a good debt collection

system. • I can meet them often in

case of delay.• I know the language and the

law of my country.• In the extreme case I can

recover through court.

Credit Guarantee is available for exports, isn’t it ?

• It doesn't protect delay.• I have to take recovery steps.• My claim is thoroughly

scrutinised and many queries are raised.

• I loose part of my dues. They only share the risk.

• They pay in India and my GR form remain pending.

• I have to satisfy the R.B.I for write off of GR form.

WE HAVE THE SOLUTION !

All these problems you mentioned can be solved if you opt for export factoring.

DELAY IN PAYMENT ?

• We give advance to the extent of 80 to 90 percent of export bills factored with us at reasonable cost

• And pay the balance on realisation

THE RISK IS COVERED• 100% credit protection

is arranged by our import factor

• The import factor is responsible for collection of the full invoice value on the due date & swift transmission of funds to us

No need to share the No need to share the risk with any credit risk with any credit guarantee organisationguarantee organisation100% of the export 100% of the export receivables are received receivables are received from abroad from abroad Only trade disputes are Only trade disputes are not covered not covered

100 % PROTECTION100 % PROTECTION

NO CLAIM TO BE MADE• Payments are automatic.• No claim to be filed• No questions to be

answered.• No follow up required• No recovery steps needed

from your side.• Spend less time and

money on follow up and documentation.

FEMA OBLIGATIONS FULFILLED AUTOMATICALLY

• Since the amount is received from aboard, exporters’ obligations are fulfilled even in case of default by the customer abroad

• Export declaration forms are disposed off even in case of default.

ADVANTAGES OF EXPORT FACTORING• Expansion of export sales by

offering competitive terms of payment

• Can offer ‘open account terms’ of around 30 to 120 days.

• Adequate and timely finance.• full cover against credit losses.• Speedy collection & remittance. • Improve the cash flow.• Reduced Administrative costs.

Exporter can offer open account terms even to unknown customers abroad. Need not insist on letter of credit.No need of export credit guarantee. Have an edge over other exportersCan effectively compete in the international market.As a result, the exports reach new heights.

EXPORT CURVE REVERSES!

1. The exporter give details of his overseas customers to us.

2. We refer the same to a factor chain international (FCI) correspondent (Import Factor) of that country.

3. The import factor establishes lines of credit for each importer after verifying their credit standing.

4. The credit line will be for the specific amount and period as per the terms of sales.

5. We fix factoring prepayment limit to the exporter who signs a factoring and credit protection agreement with us.

HOW EXPORT FACTORING HOW EXPORT FACTORING WORKS?WORKS?

Working ….1. The receivables are assigned by the exporter to

the import factor 2. The export documents are submitted to us3. We send the documents directly to the importer.4. Now we advance up to 80 to 90 per cent of the

invoice value. 5. The import factor follows up and collects the

invoice value on the due date and remit to us. 6. We pay the exporter the balance due to him.7. Exchange control forms are disposed off by us.

MECHANICS OF EXPORT FACTORING - STAGE I

INFORMATION

INFORMATION

REQUEST FOR CREDIT COVER

CREDIT COVER

LETTER OF INTRODUCTION

AGREEMENTS

CONFIRMATION

MECHANICS OF EXPORT FACTORING - STAGE II

DOCUMENTS

INDIANEXPORTER

OVERSEAS IMPORTER

EXPORT FACTOR

IMPORTFACTOR

INFORMATION ON EXPORT

100 % PAYMENT

CONTRACT CONTRACT

FOLLOW UP

PRE PAYMENT

PAYMENTS

E X P O R T D O C U M E N T S

FINAL PAYMENT

THE LINKING FACTOR

INDIAN EXPORTER

RESERVE BANK OF INDIA

IMPORT FACTOR

OVERSEAS IMPORTER

CANBANK FACTORS LTD

EXPORT FACTORING &POST SALE FINANCE BY BANKS

EXPORT FACTOR1. Dispatch of documents Direct

to the Buyer abroad in all cases.

2. Individual follow up with the buyer in his country.

3. 100 % Credit protection in buyer’s country.

4. Trade disputes not protected. 5. Responsibility of collection of

receivables with the import factor in the buyers country.

6. Automatic payment by the import factor after 90 days from due date.

7. Payment from Import Factor fulfills the obligations of the exporter.

8. Payments from import factor entitles disposal of GR forms.

BANKS1. Despatch thro’ a bank abroad in

most of the cases.

2. No such follow up

3. If ECGC cover is available, part of the risk is covered - not 100 %.

4. Not covered by ECGC also.5. Responsibility is with the exporter.

6. Claim to be submitted if ECGC cover is available.

7. Claims settled in rupees by ECGC are not export realisation in foreign exchange.

8. ECGC Payments do not entitle automatic closure of GR Form.

HOW MUCH IT COSTS ?1) Discount charges

2) credit protection charges for 100 % credit protection

3) Handling charges for follow up and collection of the bill

4) Courier Charges/ out of pocket expenses

5) Processing charges for fixing the factoring limit

1) 6.5 % per annum on the amount advanced.

2) 0.70 % to 1% of the invoice value.

3) ‘Nil’ to 8 USD / EURO per invoice. (charged only by some Import Factors)

4) Actuals.

5) 0.25% of the prepayment limit - Maximum Rs. 50,000/ for one year.

COLLECTION OF EXPORT BILLS WITHOUT PREPAYMENT

• Collection of bills can be of two types - Collection with or without credit protection.

• For Collection with credit protection, our discount charges are not applicable and other charges mentioned above apply.

• For collection without credit protection, the Import Factor charge nominal collection charges for follow up and collection of export bills.

• The collection charges are available on giving buyer details to the import factor.

EXCHANGE LOSS OR GAIN• Exporter can opt for Prepayment in the currency of the

invoice (Euro/ US Dollar) or Rupee.• The amount in foreign currency is converted to Indian Rupees

at TT buying rate on the date of advance and remitted to the exporter’s Banker.

• When the bill amount is realized, the advance granted and discount charges are adjusted in foreign currency, and balance is converted into Rupees at the TT buying rate of that day.

• Hence the exchange rate variation is applicable only for the margin amount.

• In case the advance is in rupees, the amount, on realisation is converted into rupees.

• Balance amount is released to the exporter after adjusting the rupee advance.

• Here the exchange gain or loss is to the exporter.

MATURITY FACTORING OF ECGC Export Credit Guarantee Corporation of India Ltd., (ECGC) has recently

come out with a new product ‘Without Recourse Export Maturity Factoring’

ECGC provides all the services offered by us except Prepayment. We offer prepayment to exporters against maturity Factoring of ECGC. Among others ECGC provides the following:-

100% credit guarantee protection against bad debtsRegular monitoring of outstanding credits, facilitating collection on due date, recovery at its own cost all recoverable bad debts.In the event of non-realization of factored export receivables, ECGC will make payment of the amount in Rupees, immediately upon the crystallization of dues by the financing institution.

PROCEDURE Exporter to submit a formal application to ECGC through

us. Get permitted limit for the overseas buyer approved by

ECGC. We fix a limit to the exporter for prepayment and release

100 percent of the export receivables after deducting the Factoring charges payable to ECGC and discount charges payable to us.

We send the documents direct to the overseas buyer. Exporter need not pay any collection charges to us. Only

out of pocket expenses are charged to the exporter.  

ABOUT US Incorporated in 1991 as a subsidiary of Canara Bank. Co promoted by Andhra Bank and SIDBI Premier factoring Company in India. Member of Factors Chain International , reputed

Global organisation of Factors. Certified under ISO 2002. Our Flexibility, quick decisions and outstanding

service make us different. We are growing at the rate of 25% per year.

CANBANK FACTORS LIMITEDBRANCH OFFICES

DELHI

MUMBAIPUNE

HYDERABAD

CHENNAIHOSUR

COIMBATORE

REGISTERED OFFICEBRANCHESBANGALORE

GUIDE MAP - NOT TO SCALE

T. J. KURIAKOSESENIOR VICE PRESIDENT

CANBANK FACTORS LTD.No.17, Seshadri Road,Bangalore - 560 009.Tel: 22268248, 22268249 Fax: 22268237

Website: canbankfactors.com