Mumbai: To boost trade credit insurance penetration in the trade finance line of business, the Indian Banks’ Association has sought assistance from the Reserve Bank of India (RBI) in facilitating capital relief for banks and financial institutions (FIs), which is seen as a significant obstacle hindering the growth of trade credit insurance backed trade finance products such as factoring and bill discounting.While the RBI permits capital relief to banks and FIs for policies from the Export Credit Guarantee Corporation (ECGC), similar treatment is not currently extended to insurance provided by other insurance companies. “By allowing banks to use trade credit insurance for factoring and…
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