Sbi Factors Seeks Nod For Special Status
SBI Factors, the factoring subsidiary of the State Bank of India (SBI), is seeking the finance ministrys approval for an exemption on withholding tax to make a foray into international factoring. International factoring is extremely beneficial to the exporting community, sources said.
The non-banking finance company is looking out for a special status from the finance ministry for a waiver in the withholding tax.
The withholding tax is usually deducted at source out of the interest paid by corporates seeking advances for export factoring from the company.
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According to the SBI Factors manging director, K Sankaranarayanan, Response to export factoring from our clients has been encouraging. We have received premission from the apex central bank that is Reserve Bank of India (RBI) and are awaiting approval from the State Bank of India board.
SBI Factors, which has so far been availing a line of credit from SBI and some of its associates, has plans to raise Rs 10 crore initially through inter-corporate deposits of 91 days maturity at an interest rate of nine per cent.