BAFT—the American Bankers Association’s global transaction banking subsidiary—today published a set of principles regarding the essential criteria for use and structuring of payables finance, a financial product providing support for the global economy. The principles were developed by BAFT’s Global Trade Industrial Council, which includes heads of trade from 19 of the largest trade banks in the world and are intended to provide clarity and specificity to this often-misunderstood area of trade finance.
Specifically, the principles address payables finance program structures, buyer agreements, supplier agreements and buyer and supplier commercial and contractual terms. “In the absence of written rules, these new payables finance principles provide a common framework for banks to structure their individual programs, while contributing to a broader industry understanding of payables finance and its benefits,” said BAFT President and CEO Tod Burwell.
