The Factoring Regulation Act, 2011 is designed to regulate the business of factoring in India. It provides a legal framework for the assignment of receivables to factoring companies, which can offer finance by acquiring debts owed to businesses, helping improve liquidity. The Act also outlines the roles of factors (which can be non-banking financial companies, banks, or other entities), and the process of assignment of receivables. It excludes certain activities like banks’ regular credit facilities and services related to agricultural goods.
