The Reserve Bank of India on Thursday said banks can carry out the business of factoring departmentally, without obtaining its prior approval, subject to conditions.When a bank undertakes factoring, an enterprise sells its accounts receivable (invoices) to the bank at a discount. Later, the bank recovers money from the buyer on the maturity date of the invoices.The RBI said banks may formulate a comprehensive factoring services policy with the approval of their Boards and offer services to their customers in accordance with this policy.

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