1) b. Trade Discounting Exchange of India Ltd. 2)TReDS- Trade Receivable Discounting System. 3) 3 is correct ( it is introduced by RBI. only MSME can participate as a sellers in TReDS and banks,NBFCs and any financial institution related to factoring business as a financial financiers in TReDS) Thankyou ma'am 🌻
Factoring is something like e-Negotiable Warehouse Instruments where farmers can store their produce in the warehouse for which he will be getting e-NWR receipts, which can be used to get market loans from SBI and PNB (latest pib news) of maximum 75 lakhs
E-negotiable warehouse instruments are a way to provide loans by using these instruments as collaterals whereas factoring is a financing instrument for meeting the immediate liquidity need of the firms to any purpose. The framework and the purpose of both the instruments are different.
mam in what condition do buyer have to access on treds platform? As you told us seller has to use this system because he needs money to use it as working capital then why buyer need to do reverse factoring?
In case seller demands for money (immediately after supplying goods) and the buyer does not have sufficient funds, he can discount the bills using TReDS with the consent of the seller
@@MrSaurabh048 so for example, seller sells goods worth of 100rs but demands instant cash, now buyer trades the bill of exchange to banks and gets 93rs ( discounting say) now buyer needs to pay 100Rs to seller instantly and after retail sale of the product to any customer( after 3months) the buyer again needs to pay Rs 100 to the bank..?? is my understanding correct..??
Please continue these kind of sessions...Very helpful....Apart from the preparation point of view these will help in enhancing the financial awareness Thank you
Thanks Mam for the session. I have one doubt. In the process of factoring, bank is charging commission to the seller for giving the actual bill amount, then it would be a loss for seller because seller is not getting the actual full amount of his goods and services from the bank , which he could get it from the buyer by normal payments. Can you please confrim on this point ? Answers : 1. B 2. C 3. D
Being a Product Manger working on Structured Trade Finance and Bills Discounting product, let me try to explain you with same example. Look Jethalal is the Distributor of Bajaj Electricals is called Debtor in Factoring, while The BAJAJ Electricals is called Creditor and the fianancial institution who will finance once the Bills of Echange is raised is called Factor, which in our case is SBI Bank. Now, Creditor needs the money once it solds the product to the Debtor right, so that it can produce more products of Bajaj in their Manufacturing Plant to sell further. But the Creditor also knows that Debtor can only pay money when the Bajaj product is sold, i.e. Jethalal can only pay money to Bajaj Electricals after he can successfully sell the product. And Creditor i.e. BAJAJ Electricals can't wait for the product to be sold by Jethalal after some days or months, as it has recieved new contract for products from new distributors too. Therefore, both debtor and creditor comes into a neotiation that Jethalal (Debtor) will either pay money on the day BAJAJ Electricals (Creditor) sells the product to Jethalal i.e. DAY 1 or after lets say three months Jethalal will pay the full money to BAJAJ even if product is sold or not. Therefore, Jethalal says that if BAJAJ wants money on the same day, it will not pay full amount i.e. if One table fan costs Rs 100, Jethalal will say i will pay you only Rs. 93. The Rs 7 margin is what SBI Bank (Factor) charge as a upfront interest on Jethalal. If the tenor is let's say 3 months i.e. 90 Days, Bajaj electricals will get the fund on Day 1 only, but will recieve Rs 93 instead of Rs 100 from SBI Bank once the Bills of Exchange is raised. And Jethalal, will pay SBI Bank, Rs. 100 after 90 Days. Hopefully, you understand why Bajaj ELECTRICALS in our case has agreed to get RS 93 if they want money on DAY 1 only.
Look, in case of corporates and dealer/ vendor, the transaction doesn't follow the rule which is followed when you or me like customers purchases anything from distributors or retailers. We pay exact amount on the same day, and thats why BUY NOW PAY LATER has came where you are not paying anything on DAY 1, instead the Payment Aggregator for you will pay the Merchant same amount on Day 1 and you will pay later on to the payment aggregator the amount plus some interest (Not applicable in all cases).
Bro 90% of the lecture is in English we are finding a little bit difficult to understand the whole concept in English still trying our best. Kuch thoda bich bich me Hindi ho to pdhne me feel aata hai. Thoda bhai ap bhi compromise krlo yr.
bahut acccha samjhaya
Thank you. Keep learning :)
Thank you 🎉
Thank you so much ma'am ❤
THANK YOU SO MUCHHH
Most welcome! All the best and keep preparing.
beautifully explained! thankyou mam
Glad that you liked the session! Stay tuned.
Very good detail explanation
Mam sare angrej nahi hote
Thanks Ma'am
Keep watching
excellent thanks a lot
1) b. Trade Discounting Exchange of India Ltd.
2)TReDS- Trade Receivable Discounting System.
3) 3 is correct ( it is introduced by RBI. only MSME can participate as a sellers in TReDS and banks,NBFCs and any financial institution related to factoring business as a financial financiers in TReDS)
Thankyou ma'am 🌻
Q3 option 1 is incorrect as it was launched by RBI and not by Ministry of Finance
@@MrSaurabh048 yeah thanks 🌻😁
Factoring is something like e-Negotiable Warehouse Instruments where farmers can store their produce in the warehouse for which he will be getting e-NWR receipts, which can be used to get market loans from SBI and PNB (latest pib news) of maximum 75 lakhs
E-negotiable warehouse instruments are a way to provide loans by using these instruments as collaterals whereas factoring is a financing instrument for meeting the immediate liquidity need of the firms to any purpose. The framework and the purpose of both the instruments are different.
Wow, this is my first time opening this playlist and delighted to see the way of explanation . Thank you ma’am!
You’re welcome 😊 keep learning.
mam in what condition do buyer have to access on treds platform? As you told us seller has to use this system because he needs money to use it as working capital then why buyer need to do reverse factoring?
In case seller demands for money (immediately after supplying goods) and the buyer does not have sufficient funds, he can discount the bills using TReDS with the consent of the seller
@@MrSaurabh048 so for example, seller sells goods worth of 100rs but demands instant cash, now buyer trades the bill of exchange to banks and gets 93rs ( discounting say) now buyer needs to pay 100Rs to seller instantly and after retail sale of the product to any customer( after 3months) the buyer again needs to pay Rs 100 to the bank..?? is my understanding correct..??
how c2fo will earn money??? as same amount is debiting from financer ... will be there no commision or extra charges of using treds???
Please continue these kind of sessions...Very helpful....Apart from the preparation point of view these will help in enhancing the financial awareness
Thank you
Thank you for the suggestion. We will for sure. Stay tuned:)
Thanks Mam for the session. I have one doubt. In the process of factoring, bank is charging commission to the seller for giving the actual bill amount, then it would be a loss for seller because seller is not getting the actual full amount of his goods and services from the bank , which he could get it from the buyer by normal payments. Can you please confrim on this point ?
Answers :
1. B
2. C
3. D
Being a Product Manger working on Structured Trade Finance and Bills Discounting product, let me try to explain you with same example. Look Jethalal is the Distributor of Bajaj Electricals is called Debtor in Factoring, while The BAJAJ Electricals is called Creditor and the fianancial institution who will finance once the Bills of Echange is raised is called Factor, which in our case is SBI Bank. Now, Creditor needs the money once it solds the product to the Debtor right, so that it can produce more products of Bajaj in their Manufacturing Plant to sell further. But the Creditor also knows that Debtor can only pay money when the Bajaj product is sold, i.e. Jethalal can only pay money to Bajaj Electricals after he can successfully sell the product. And Creditor i.e. BAJAJ Electricals can't wait for the product to be sold by Jethalal after some days or months, as it has recieved new contract for products from new distributors too. Therefore, both debtor and creditor comes into a neotiation that Jethalal (Debtor) will either pay money on the day BAJAJ Electricals (Creditor) sells the product to Jethalal i.e. DAY 1 or after lets say three months Jethalal will pay the full money to BAJAJ even if product is sold or not. Therefore, Jethalal says that if BAJAJ wants money on the same day, it will not pay full amount i.e. if One table fan costs Rs 100, Jethalal will say i will pay you only Rs. 93. The Rs 7 margin is what SBI Bank (Factor) charge as a upfront interest on Jethalal. If the tenor is let's say 3 months i.e. 90 Days, Bajaj electricals will get the fund on Day 1 only, but will recieve Rs 93 instead of Rs 100 from SBI Bank once the Bills of Exchange is raised. And Jethalal, will pay SBI Bank, Rs. 100 after 90 Days. Hopefully, you understand why Bajaj ELECTRICALS in our case has agreed to get RS 93 if they want money on DAY 1 only.
Look, in case of corporates and dealer/ vendor, the transaction doesn't follow the rule which is followed when you or me like customers purchases anything from distributors or retailers. We pay exact amount on the same day, and thats why BUY NOW PAY LATER has came where you are not paying anything on DAY 1, instead the Payment Aggregator for you will pay the Merchant same amount on Day 1 and you will pay later on to the payment aggregator the amount plus some interest (Not applicable in all cases).
@@Enlightyoursoul743 Thanks for the detailed explanation .
@@Enlightyoursoul743 ok Thanks.
Ans:
1) b
2) c
3) d
Pls USE HINGLISH while explaining 🙏
Please discuss NOSTRO & VOSTRO account in the news with example madam.
can u tell me whether bajaj charges gadda electronics for the advanced credit
Perfectly explained, thank you ma'am !!
Nice session
Ma’am, Please explain reverse factoring in Jethalal’s example
Please speak in English
Bro 90% of the lecture is in English we are finding a little bit difficult to understand the whole concept in English still trying our best. Kuch thoda bich bich me Hindi ho to pdhne me feel aata hai.
Thoda bhai ap bhi compromise krlo yr.
Are u indian🙄
Mam, can defaulting happen in Reverse factoring..?? if happens will the transaction without recourse be still valid..??