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IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
In factoring, who bears the risk of bad debts if the customer fails to pay the invoice?
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Recourse vs Non-Recourse Factoring
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 33
WA 33
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
Exporters often need to finance medium-term receivables. What defines the process of 'Forfaiting'?
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What is Forfaiting?
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 32
WA 32
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
Factoring is a financial transaction where a company sells its accounts receivable to a third party. Under which Indian act is this business formally regulated?
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Definition of Factoring
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 31
WA 31
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
Both bills discounting and factoring provide short-term finance against trade receivables. What is the key legal difference regarding the debt itself?
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Factoring vs Bills Discounting
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 28
WA 28
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
Factoring involves two primary types of charges levied on the client. What are they?
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Fees Involved in Factoring
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 27
WA 27
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IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
One major difference between factoring and forfaiting lies in the credit risk. How do they differ on the concept of 'recourse'?
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Forfaiting vs Factoring: Recourse
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 27
WA 27
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
In a forfaiting transaction, what is a 'Commitment Fee' and when is it applicable?
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Forfaiting Fees: Commitment Fee
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 27
WA 27
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
When a financier buys a Factoring Unit on TReDS, who bears the risk if the corporate buyer eventually defaults on payment?
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TReDS Recourse Policy
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 26
WA 26
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
International factoring usually involves two factors: the Export Factor and the Import Factor. What is the specific role of the Import Factor?
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International Two-Factor System
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 26
WA 26
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
Entities wishing to set up and operate a TReDS platform must meet strict RBI criteria. What is the minimum financial requirement?
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TReDS Operator Eligibility: Capital
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IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
Unlike factoring which usually holds back a 20% margin, what percentage of the invoice value is financed in a forfaiting transaction?
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Forfaiting Financing Level
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 25
WA 25
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
When an MSME uploads an invoice onto TReDS and the corporate buyer accepts it, what does this digital document become?
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Factoring Unit (FU) in TReDS
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 24
WA 24
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
In domestic factoring, the factor makes an upfront payment (usually 80%) upon invoice submission. What is the maximum credit period normally permitted?
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Domestic Factoring Credit Period
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 23
WA 23
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The TReDS platform operates by bringing together multiple parties. Who are the three direct participants in the TReDS ecosystem?
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TReDS Participants
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 21
WA 21
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
To help MSMEs manage their working capital, RBI introduced an electronic platform. What does TReDS stand for?
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TReDS Full Form & Purpose
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IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
RBI mandates diverse ownership for entities operating a TReDS platform. What is the maximum shareholding allowed for entities other than the promoters?
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TReDS Ownership Limits
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 24
WA 24
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
While usually an MSME seller uploads the invoice, TReDS also supports 'Reverse Factoring'. Who initiates the transaction in this case?
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Reverse Factoring in TReDS
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 22
WA 22
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How does the TReDS platform inherently improve the pricing for MSMEs compared to traditional, bilateral factoring arrangements?
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TReDS vs Traditional Factoring
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 22
WA 22
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
Forfaiting is typically backed by specific, legally enforceable trade documents. What are the common instruments discounted in forfaiting?
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Forfaiting Eligible Instruments
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 21
WA 21
IE-IFS Capsule Cards PRO Factoring, Forfaiting and…
While the two-factor system is common, what defines a 'Single factor system' in international factoring?
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Single Factor System
Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) 19
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Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) — JAIIB IE-IFS Capsules

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All 20 cards on this page
Recourse vs Non-Recourse Factoring In factoring, who bears the risk of bad debts if the customer fails to pay the invoice? What is Forfaiting? Exporters often need to finance medium-term receivables. What defines the process of 'Forfaiting'? Definition of Factoring Factoring is a financial transaction where a company sells its accounts receivable to a third party. Und… Factoring vs Bills Discounting Both bills discounting and factoring provide short-term finance against trade receivables. What is the k… Fees Involved in Factoring Factoring involves two primary types of charges levied on the client. What are they? Forfaiting vs Factoring: Recourse One major difference between factoring and forfaiting lies in the credit risk. How do they differ on the… Forfaiting Fees: Commitment Fee In a forfaiting transaction, what is a 'Commitment Fee' and when is it applicable? TReDS Recourse Policy When a financier buys a Factoring Unit on TReDS, who bears the risk if the corporate buyer eventually de… International Two-Factor System International factoring usually involves two factors: the Export Factor and the Import Factor. What is t… TReDS Operator Eligibility: Capital Entities wishing to set up and operate a TReDS platform must meet strict RBI criteria. What is the minim… Forfaiting Financing Level Unlike factoring which usually holds back a 20% margin, what percentage of the invoice value is financed… Factoring Unit (FU) in TReDS When an MSME uploads an invoice onto TReDS and the corporate buyer accepts it, what does this digital do… Domestic Factoring Credit Period In domestic factoring, the factor makes an upfront payment (usually 80%) upon invoice submission. What i… TReDS Participants The TReDS platform operates by bringing together multiple parties. Who are the three direct participants… TReDS Full Form & Purpose To help MSMEs manage their working capital, RBI introduced an electronic platform. What does TReDS stand… TReDS Ownership Limits RBI mandates diverse ownership for entities operating a TReDS platform. What is the maximum shareholding… Reverse Factoring in TReDS While usually an MSME seller uploads the invoice, TReDS also supports 'Reverse Factoring'. Who initiates… TReDS vs Traditional Factoring How does the TReDS platform inherently improve the pricing for MSMEs compared to traditional, bilateral… Forfaiting Eligible Instruments Forfaiting is typically backed by specific, legally enforceable trade documents. What are the common ins… Single Factor System While the two-factor system is common, what defines a 'Single factor system' in international factoring?
Chapters in this paper
Micro Finance Institutions Non-Banking Financial Companies (NBFCs) Fixed Income Markets – Debt and Bond Markets Interconnectedness of Markets and Market Dynamics Merchant Banking Services Foreign Exchange Markets (IE-IFS) Factoring, Forfaiting and Trade Receivables Discounting System (TReDS) Venture Capital Lease Finance and Hire Purchase Credit Rating and Credit Scoring Pension Products Para Banking and Financial Services Provided by Banks Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) An Overview of Indian Economy Fundamentals of Economics, Microeconomics, and Macroeconomics and Types of Economies Indian Financial System – An Overview
Modules in IE-IFS
MODULE A: Indian Economic Architecture MODULE B: Economic Concepts Related to Banking MODULE C: Indian Financial Architecture MODULE D: Financial Products & Services
JAIIB papers
IE-IFS — Indian Economy & Indian Financial System PPB — Principles & Practices of Banking AFM — Accounting & Financial Management for Bankers RBWM — Retail Banking & Wealth Management
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