BANKING AFFAIRS

Detailed explanation-1: -The Kalyanasundaram Study Group set up by the Reserve Bank of India in January 1988 to examine the feasibility and mechanics of starting factoring organisations in the country paved the way for provision of domestic factoring services in India.

Detailed explanation-2: -Which of the following committee formed the basis for the introduction of factoring services in India? Notes: A Committee headed by Shri C. S. Kalyan Sundaram went into the aspects of factoring services in India in 1988, which formed the basis for introduction of factoring services in India.

Detailed explanation-3: -The idea of providing factoring services in India was first thought by Vaghul committee.

Detailed explanation-4: -The British bureaucracy governing India wanted to reorganise the existing structures of India into linguistically devised states, mindful of the existing boundaries of the hundreds of Princely States which the British did not control. They commissioned Sundaram in 1936 to prepare this document.

Detailed explanation-5: -Definition: Factoring is a type of finance in which a business would sell its accounts receivable (invoices) to a third party to meet its short-term liquidity needs. Under the transaction between both parties, the factor would pay the amount due on the invoices minus its commission or fees.