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BUSINESS. BEYOND. BOUNDARIES. Now Made Easy. CANBANK FACTORS LIMITED. Your Cash flow Partner. Export Factoring. Why your Exports are not picking up?. 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.

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BEYOND

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  1. BUSINESS BEYOND BOUNDARIES Now Made Easy

  2. CANBANK FACTORS LIMITED Your Cash flow Partner Export Factoring

  3. Why your Exports are not picking up? 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.

  4. 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.

  5. 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.

  6. WE HAVE THE SOLUTION ! • All these problems you mentioned can be solved if you opt for export factoring. CANBANK FACTORS LTD

  7. 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 DELAY IN PAYMENT?

  8. 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 THE RISK IS COVERED

  9. 100 % PROTECTION • No need to share the risk with any credit guarantee organisation • 100% of the export receivables are received from abroad • Only trade disputes are not covered

  10. 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. NO CLAIM TO BE MADE

  11. 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.

  12. 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.

  13. EXPORT CURVE REVERSES! 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 exporters Can effectively compete in the international market. As a result, the exports reach new heights.

  14. HOW EXPORT FACTORING WORKS? • The exporter give details of his overseas customers to us. • We refer the same to a factor chain international (FCI) correspondent (Import Factor) of that country. • The import factor establishes lines of credit for each importer after verifying their credit standing. • The credit line will be for the specific amount and period as per the terms of sales. • We fix factoring prepayment limit to the exporter who signs a factoring and credit protection agreement with us.

  15. Working …. • The receivables are assigned by the exporter to the import factor • The export documents are submitted to us • We send the documents directly to the importer. • Now we advance up to 80 to 90 per cent of the invoice value. • The import factor follows up and collects the invoice value on the due date and remit to us. • We pay the exporter the balance due to him. • Exchange control forms are disposed off by us.

  16. CONFIRMATION OVERSEAS IMPORTER INDIAN EXPORTER EXPORT FACTOR IMPORT FACTOR MECHANICS OF EXPORT FACTORING - STAGE I INFORMATION LETTER OF INTRODUCTION INFORMATION AGREEMENTS REQUEST FOR CREDIT COVER CREDIT COVER

  17. MECHANICS OF EXPORT FACTORING - STAGE II OVERSEAS IMPORTER INDIAN EXPORTER CONTRACT CONTRACT DOCUMENTS PAYMENTS FINAL PAYMENT PRE PAYMENT FOLLOW UP E X P O R T D O C U M E N T S INFORMATION ON EXPORT EXPORT FACTOR IMPORT FACTOR 100 % PAYMENT

  18. OVERSEAS IMPORTER INDIAN EXPORTER CANBANK FACTORS LTD IMPORT FACTOR RESERVE BANK OF INDIA THE LINKING FACTOR

  19. EXPORT FACTOR Dispatch of documents Direct to the Buyer abroad in all cases. Individual follow up with the buyer in his country. 100 % Credit protection in buyer’s country. Trade disputes not protected. Responsibility of collection of receivables with the import factor in the buyers country. Automatic payment by the import factor after 90 days from due date. Payment from Import Factor fulfills the obligations of the exporter. Payments from import factor entitles disposal of GR forms. BANKS Despatch thro’ a bank abroad in most of the cases. No such follow up If ECGC cover is available, part of the risk is covered - not 100 %. Not covered by ECGC also. Responsibility is with the exporter. Claim to be submitted if ECGC cover is available. Claims settled in rupees by ECGC are not export realisation in foreign exchange. ECGC Payments do not entitle automatic closure of GR Form. EXPORT FACTORING &POST SALE FINANCE BY BANKS

  20. Discount charges credit protection charges for 100 % credit protection Handling charges for follow up and collection of the bill Courier Charges/ out of pocket expenses Processing charges for fixing the factoring limit 6.5 % per annum on the amount advanced. 0.70 % to 1% of the invoice value. ‘Nil’ to 8 USD / EURO per invoice. (charged only by some Import Factors) Actuals. 0.25% of the prepayment limit - Maximum Rs. 50,000/ for one year. HOW MUCH IT COSTS ?

  21. 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.

  22. 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.

  23. 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 debts • Regular 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.

  24. 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.

  25. 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.

  26. CANBANK FACTORS LIMITED BRANCH OFFICES DELHI MUMBAI PUNE HYDERABAD REGISTERED OFFICE BRANCHES BANGALORE CHENNAI HOSUR COIMBATORE GUIDE MAP - NOT TO SCALE

  27. THANK YOU T. J. KURIAKOSE SENIOR VICE PRESIDENT CANBANK FACTORS LTD. No.17, Seshadri Road,Bangalore - 560 009. Tel: 22268248, 22268249 Fax: 22268237 Website: canbankfactors.com

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