New Delhi, Dec 21 (PTI) Lok Sabha today passed a bill to regulate the factoring business and help the micro, small and medium enterprises in dealing with liquidity problems. The Regulation of Factors (Assignment of Receivables) Bill 2011, which was passed by voice vote, was introduced in the House by Finance Minister Pranab Mukherjee during the last Budget Session. "The bill is applicable to all types of industry whether it is small, medium or big", Minister of State for Finance Namo Narayan Meena said, winding up the discussion on the bill. Responding to the members' demand to fix commission under the law, the minister said, "The discount chart would depend upon bilateral contracts of the two parties. That will be mainly market driven." However, expressing dissatisfaction over minister's reply on the bill, Uday Singh (BJP) said, "I am extremely disappointed by the minster's reply. He has given same reply which Finance Ministry gives. There is no cap on commission and discount was mentioned in the bill." The bill, among other things, seeks to provide for and regulate the assignment of receivables by making provision for registration and rights and obligations of parties. Factors provide liquidity to small and medium enterprises against their receivables from customers and is regarded as a cash management tool. Among other provisions, the bill proposes to ban financial institutions from directly entering the factor business. PTI TGB KKS CS
