FORM-2
THE PATENTS ACT, 1970
(39 of 1970)
&
THE PATENTS RULES, 2003
COMPLETE SPECIFICATION
(See section 10; rule 13)
A REVERSE FACTORING BASED VIRTUAL CENTRAL MARKET
PLACE SYSTEM
(a) NATIONAL STOCK EXCHANGE OF INDIA LTD.,
an Indian Company of Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051,Maharashtra, India; and
(b) SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
an Indian financial Institution of SIDBI Tower, 15 Ashok Marg,Lucknow 226 001, Uttar Pradesh, India
THE FOLLOWING SPECIFICATION PARTICULARLY DESCRIBES THE INVENTION AND THE MANNER IN WHICH IT IS TO BE PEFFORMED

Field of the Invention:
This invention relates to management and auctioning systems.
Particularly, this invention relates to a reverse factoring based virtual central market place system.
Background of the Invention:
'Trade' essentially relates to transfer of commodities or services or assets or liabilities, typically in exchange of cash, or in return for other commodities or services or assets. Access to such commodities or services may be facilitated by a market, which serves as a showcase. A plurality of users may serve as Purchasers while a plurality of users may serve as Suppliers. Purchasers include persons or entities interested in buying a commodity or service. Suppliers include persons or entities interested in offering/selling their commodity or service. A separate entity which may play an important role in a market is a Financer. A Financer may be a person or entity with surplus of funds, and with an intention to disburse the surplus of funds to either a Purchaser or Supplier, depending upon requisition or intent or clause.
When these three players are involved in a market, scenarios such as 'Factoring' and 'Reverse Factoring' may be envisaged, as a routine transaction proceeding.
'Factoring' leads to a market scenario in which a Purchaser purchases products from a Supplier, for which instruments (invoice/bills etc.) are raised. The Supplier, considering the practicalities of the trade and/or market provides a grace period, typically ranging from 15 days to 180 days for settling the instrument. Interest on this time period may or may not be charged or compounded. Meanwhile, in case, the Supplier is in need of liquid funds, would, in turn, approach a Financer or a set of Financers with the qualified instruments. Depending upon the credit rating of the Supplier, calculated on random parameters decided arbitrarily by the Financer, the Financer may decide to lend money to the Supplier, irrespective of the Purchaser in the chain of the said trade.

In a reverse scenario, 'Reverse Factoring' leads to a market scenario in which, when a Purchaser purchases products from a Supplier, the Purchaser, carries the qualified instruments to a Financer, and seeks to finance the instrument on behalf of the suppliers. (In this case also, the discounted funds will be received by supplier and purchaser will pay the full instrument amount to financier on the maturity date). The Financer, now executes a credit based check mechanism, based again on random or arbitrary parameters in order to decide whether to provide the loan, and also the time duration or rate of interest of the loan. The identity of the Supplier is of no consequence in the fate of the Purchaser's deal with the Financer.
While multiple Financers may be readily available at any point of time, and with multiple Supplier-Purchaser trades taking place, it is essential that a Financer finds a correct Purchaser/Supplier for lending money and also that a correct Purchaser/Supplier finds a correct Financer for borrowing money. The 'correct'-ness may relate to credit-worthiness, timelines, rates of interests, legalities, and the like payback related parameters.
Prior Art:
KR20030022563 discloses a METHOD FOR SUPPLYING REVERSE AUCTION SERVICE OF LOAN ON REAL ESTATE SECURITY THROUGH INTERNET. This system discloses the idea of providing a loan by a financial institution to a user. Further, security commodity information is loaded onto the system.
However, the system of KR20030022563 is only related to real estate products. Further, it does not involve a tripartite system involving a Purchaser, a Supplier, and a Financer. It also does not involve a Guarantor and / or an Insurer adapted to back up the finance deal.
KR20040074687 discloses a METHOD FOR TRADING FINANCIAL GOODS TO BE CANCELLED BEFORE EXPIRATION THROUGH AUCTION/REVERSE AUCTION USING INTERNET. This system aims to provide a mutual agreement from a deposit/installment saver and a person wanting the investment shorter than a contract term by using an auction/reverse auction method. Further, a supplier inputs the financial information including a sort, a contract price, a contract term, a financial institution name, an expiration/cancellation interest rate, a

desired trading time, a payment term, an installment price, and the lowest successful rate/price of the financial goods. A service provider constructs/provides a database to the members by storing a result analyzing a current value of the deposit/installment savings registered from the supplier. The demanders select the desired financial goods and bid the buying rate/price. A successful bidder is decided if a bidding condition is satisfied.
However, the system of KR20040074687 does not involve a tripartite system involving a Purchaser, a Supplier, and a Financer. It also does not involve a Guarantor and / or an Insurer adapted to back up the finance deal.
There is a need to overcome the limitations of the prior art. Objects of the Invention:
An object of the invention is to provide a centralized platform for attracting financers to participate in a market.
Another object of the invention is to provide a reduced risk platform for facilitating purchaser-financer or supplier-financer deals.
Yet another object of the invention is to reduce documentation in trade market.
Still another object of the invention is to provide a virtual centralized market platform.
An additional object of the invention is to provide a payment management service to keep track of payables.
Summary of the Invention:
According to this invention, there is provided a reverse factoring based virtual central market place system adapted to provide a multichannel platform for displaying and auctioning regulated and reviewed instruments of financial value to a pre-defined consortium of financers, said system comprises:

- purchaser entry module adapted to allow at least a purchaser to deposit its purchase instrument for review and further for auctioning'
- review mechanism, in tune with pre-defined standards of market condition, adapted to categorise said purchaser's instrument;
- display means adapted to display the reviewed purchaser's instrument;
- auctioning platform adapted to provide a platform for auctioning at least said displayed purchaser instrument;
- supplier entry module to allow at least a supplier to enter the auctioning platform for facilitating selection of the best discounting rate for said supplier;
- multi-port financer entry module adapted for allowing at least a financer to read/study said displayed instrument, and raise a bid in relation to offering finance for said purchaser instrument;
- guarantor module adapted to provide a check mechanism of guarantee for purchaser's credit rating based on empirical data of previous purchase credentials and for financer's credit worthiness based on pre-defined parameters by said guarantor module;
- computational engine adapted to compute a winning financer bid by a financer; and
- insurer means adapted to allow an insurance agency to partake in the deal in order to provide a warranting monetary mechanism in order to back said guarantor module
Typically, said system includes a platform operator adapted to monitor the functionalities of said auctioning platform.
Typically, said system includes time session keeping means adapted to time the bidding session for pre-defined periods of time.
Typically, said system includes guarantor module include a rating module adapted to negatively rates the financer upon dishonouring a bid, and further adapted to positively rates the financer upon honouring said bid.
Typically, said system includes customisation module adapted to define a time frame of the auctioning platform so that the obligation is on Purchaser to pay the Financier on the maturity date.

Typically, said system includes payment gateway adapted for facilitating said payment, as worked out by said virtual market place.
Typically, said system includes payment management service adapted to keep track of payables.
Typically, said system includes reporting mechanism adapted to allow various participants of the system, including an operator, to access reports based on the rules set by the platform operator and the access controls set by their respective administrators.
Typically, said system includes empanelment means adapted to allow the participants desirous of transacting through the platform to apply for empanelment, accompanied with the requisite supporting documents for verification of the eligibility to participate.
Typically, said system includes editing means adapted to allow a participant desirous of editing personal details.
Typically, said system includes parameter setting means adapted to set and maintain operating parameters by the platform operator.
Typically, said system includes deregistering means adapted to allow a participant to deregister from said platform.
Brief Description of the Accompanying Drawings:
The invention will now be described in relation to the accompanying drawings, in which:
FIGURE 1 shows schematically a block diagram of the proposed invention inclusive of all components from different possible embodiments of the system;
FIGURES 1A-C show the envisioned models in variance with the basic system of Figure 1;
FIGURES 2A-F show the process flow diagrams for the different functions of the platform operator;

FIGURES 3A-C show the process flow diagrams for the different functions of the empanelled financier;
FIGURES 4A-E show the process flow diagrams for the different functions of the empanelled purchaser;
FIGURE 5 shows the process flow diagrams for the different functions of the empanelled supplier; and
FIGURES 6A-B show the process flow diagrams for the different functions common to all the empanelled participants on the auctioning platform.
Detailed Description of the Accompanying Drawings:
Figure 1 illustrates a schematic of the system (100) of this invention.
According to this invention, there is provided a REVERSE FACTORING based VIRTUAL
CENTRAL MARKET PLACE (100) adapted to provide a multichannel platform for
displaying and auctioning regulated and reviewed instruments of financial value to a pre-defined
consortium of financers.
In accordance with an embodiment of this invention, there is provided a purchaser entry module (PEM) adapted to allow a purchaser (P) to deposit its purchase instrument for review and further for auctioning. Predefined fields may be set-up for entering additional details in relation to the instrument, and/or need. A review mechanism (RM), in tune with pre-defined standards of market condition, may categorise the purchaser's (P) entry and put it up for display on said auctioning platform (AP); either in a segmented/local zone or a global zone. Typically, said segment may be in reference to the product/commodity being dealt with, in reference to the risk factor according to market scenario, in reference to the amount of the instrument, or the like pre-defined dynamic or static variables. Credit limiting mechanism (CLM) may be set up to put a tag on allowable credit, through this system for all participants. The Credit limiting mechanism (CLM) may maintain the collaterals from the participants. The auctioning platform (AP) may also be adapted to allow Suppliers (S) to enter the platform through a Supplier Entry Module (SEM) to access its functionalities. The Suppliers (S) may be

introduced by the Purchasers (P) on the system (100). The auctioning platform (AP) will facilitate selection of the best discounting rate for the Supplier.
Preferably, the Review Mechanism (RM) is adapted to review each of said Purchaser (P), Supplier (S), or Financer (F), before being introduced on the Auctioning Platform (AP). Preferably, each of the participants can provide their own preferences for customizing the functionalities exhibited on the platform, by presenting their terms and conditions, either in predefined format or in a personal preferred format.
In accordance with another embodiment of this invention, a Platform Operator (PO) may be engaged to monitor the functionalities of the Auctioning Platform (AP).
In accordance with another embodiment of this invention, there is provided a multi-port financer entry module (FEM) adapted for allowing a financer (F) to read/study said displayed instrument, and raise a bid in relation to offering finance for said instrument. According to an alternative embodiment, there may be provided an optional customizing module for customizing the duration of the finance or the like parameters.
Typically, the Financers (F) may engage in a competitive bidding process. Alternatively, the Financers (F) may engage in a static quotation auctioning process. The Financiers (F) may engage in manual or auto-auction mode.
In accordance with yet another embodiment of this invention, there is provided a guarantor module (GM) adapted to provide a check mechanism of guarantee for the following:
- Purchaser's (P) credit rating based on empirical data of previous purchase credentials;
- Financer's (F) credit worthiness based on pre-defined parameters by said guarantor module (GM);
In accordance with still another embodiment of this invention, there is provided a time session keeping means (TM) adapted to time the bidding session for pre-defined periods of time.

In accordance with an additional embodiment of this invention, there is provided a computational engine (CE) adapted to compute a winning financer bid. At the end of each bidding session, the best deal offered by a financer (F) is let known. The financer (F) in accordance with agreed parameters is indebted to honour the deal, and hence agrees to finance the purchaser (P), failing which, the guarantor module (GM) negatively rates the financer (F), and upon honouring, the guarantor module (GM) positively rates the financer (F).
Preferably, this is in accordance with a maturity leg transaction wherein, a time frame may be defined by the customization module of the auctioning platform (AP) so that the obligation is on Purchaser (P) to pay the Financier (F) on the maturity date.
In accordance with yet an additional embodiment of this invention, there is provided an insurer means (this function may be performed by the platform operator or any other entity) adapted to allow an insurance agency to partake in the deal. Typically, the Insurer (I) through said Insurer (I) means monitors the deal on platter, studies the credit rating of the Purchaser (P), the Financer (F), and may also study the Supplier's credit rating, if need be, and provide a warranting monetary mechanism in order to back said guarantor module (GM), thus allowing the risk to be transferred from the Financer (F) to the Insurer (I). (It is an alternative embodiment wherein the Insurer (I) may not be directly monitoring each deal on the system) In accordance with still an additional embodiment of this invention, there is provided a payment gateway (PG) adapted for facilitating said payment, as worked out by said virtual market place (100).
In accordance with yet an additional embodiment of this invention, there is provided a payment management service (PS) to keep track of payables.
In accordance with another embodiment of this invention, there is provided a Reporting Mechanism (RepM) which may be setup to allow various participants of the system, including the operator itself, to access reports based on the rules set by the platform operator and the access controls set by their respective administrators.

It is envisioned that the following models of working may be possible:
- auctioning through the auctioning platform (AP) with or without the
guarantor module (GM);
- auctioning through the auctioning platform (AP) with or without the anonymity of the
participants.
1) The system described above can be implemented in whole or as a variation of the same depending on the demand in the market. Some of the representative models being, but not limited to:Captive reverse factoring model adapted to provide automation of the reverse factoring process;
2) Competitive reverse factoring model adapted to provide automation of reverse factoring process and would include features and embodiments for providing a competitive structure of bidding for factoring instruments and credit limits assigned by financiers to respective purchasers; and
3) Competitive reverse factoring market with anonymity adapted to provide automation of reverse factoring process and would include features and embodiments for providing a competitive structure of bidding for factoring instruments and wherein financers may not know the owners/assignors of the factoring instruments and credit limits assigned by the platform operator for each participant.
1. Captive Model Implementation (Figure 1A)
In this model, as shown in Figure 1A, the system functions as an automated reverse factoring system. The model is driven by the Financier which allows identified purchasers and introduces them on the portal. In this implementation, the credit rating of the purchaser is done only by a single financier who has introduced the said purchaser. The purchaser gets only a single interest rate from the same financier who has introduced it. In this there is a formal agreement between a purchaser and the financier.
This model is extendable as it allows the same platform operator to develop similar parallel platforms for multiple financiers.

Functioning of Model 1:
• Multiple financiers may avail the services, but the financiers cannot discount each other's' invoices i.e. parallel platforms can exists independently for multiple financiers.
• After an invoice is raised and all quality and other checks are satisfactory, the purchaser would upload the details on the platform
• Suppliers would choose whether they want to get their invoices reverse factored, but there would be only one financier available for reverse factoring (One who introduced the purchaser of that supplier)
• Supplier, on opting for reverse factoring, would get the discounted amount from the financier.
• Purchaser would pay the financier, in case the instrument is discounted, and the supplier otherwise, on the instrument due date.
• Financiers would have the facility to set up limits and discount rates for their purchasers. The limits would be monitored and updated online as instruments get reverse-factored/funds repaid by purchaser.
• The funds transactions will be handled through RTGS/NEFT mechanism through participating financiers/banks.
2. Competitive Reverse Factoring Model without anonymity (Figure IB)
In this model, as shown in FIG IB, the same platform is made open for multiple financiers. Here every purchaser can offer her instruments to all the financiers on the platform. The financiers on their part have will perform a credit analysis of the purchasers and offer discount rates and credit limits based on the same. The purchaser will have to make individual agreements with every financier offering a discount rate to her.
During the auction session, the different discount rates available to a purchaser are displayed from which he can choose the best rate for factoring his instrument. The competition arises from the fact that in a multiple financier scenario, the business will be taken by the financier who offers the best discount rate and this will push the financiers to offer competitive interest rates.

Functioning of Model 2
• Multiple financiers would participate for discounting the instruments. The qualified instruments uploaded by purchasers would be available for reverse-factoring to all the financiers. Financiers will have agreement with the purchasers for factoring the instruments for their respective suppliers.
• After an invoice is raised and all quality and other checks are satisfactory, the purchaser would upload the details on the platform
• Suppliers would choose whether they want to get their invoices reverse factored. Suppliers can get the instrument reverse-factored through the empanelled financier offering the best rate
• Reverse factoring can be carried out in two modes
o Fixed-quote market: The financiers would specify fixed discount rate quotes for purchasers, specifying a credit limit. The suppliers of a purchaser would view the discount rates quoted by various financiers and select the best rate or opt for auto-selection.
o Competitive auction market: The suppliers would mark their instruments for auctioning. The financiers would view the instruments available in the auction and bid competitively for reverse-factoring. Financiers can revise their interest rate quotes several times during the auction session. The financier quoting the best rate would reverse-factor the instrument
• Supplier, on selection of a best bid, would get the discounted amount from the financier.
• Purchaser would pay the financier, in case the instrument is discounted, and the supplier otherwise, on the instrument due date.
• Financiers would have the facility to set up limits and discount rates for their purchasers. The limits would be monitored and updated online as instruments get bid for/reverse-factored/funds repaid by purchaser.

• The funds transactions will be handled through RTGS/NEFT mechanism through
participating financiers/banks.
3. Competitive Reverse Factoring Model with anonymity (Figure 1C)
This model, as shown in FIG 1C, accords anonymous bidding in reverse factoring through the auction mechanism. An independent credit worthiness of registered participants is carried out. Based on the outcome of the credit check mechanism, the purchaser's credit limits set and they are bucketed into tranches defined as per set parameters. Time for the bidding session is set by the platform operator. The financier offers varying bids to the standardized tranches he wants to make an offer to. The offers made are valid till a predefined time period. The best offer is matched. The financier in accordance with agreed parameters is indebted to honor the deal, and hence finance the purchaser. In the event the financier fails to provide the financing he is rated negatively and upon timely honoring of the payment he is rated positively. On maturity the purchaser makes the repayment to the central counterparty which assigns it to the financier due to receive the payment. This model also encompasses the role of an insurer who may after due evaluation of the participants provide comprehensive or specific insurance mechanism which would be triggered by the failure on the part of the participants to meet their obligations due.
Functioning of Model 3
• The platform operator will setup credit limits for the purchasers, which will be utilized against the instruments factored by multiple financiers on the platform. The platform operator may decide to back these limits with collaterals from the purchasers.
• Multiple financiers may avail the services, instruments uploaded would be available for reverse-factoring to all the financiers
• After an invoice is raised and all quality and other checks are satisfactory, the purchaser would upload the details on the platform
• Suppliers would choose whether they want to get their invoices reverse factored. Suppliers can get the instrument reverse-factored through the empanelled financier

offering the best rate. They would only get to view the rates and NOT the financier quoting the rate.
• Reverse factoring can be carried out in two modes
o Fixed-quote market: The financiers would specify fixed discount rate quotes for credit rating, specifying a credit limit. The suppliers of a purchaser (belonging to a credit rating group) would view the discount rates quoted by various financiers and select the best rate
o Competitive auction market: The suppliers would mark their instruments for auctioning. The financiers would view the instruments available under a credit rating in the auction and bid competitively for reverse-factoring. Financiers can revise their interest rate quotes several times during the auction session. The financier quoting the best rate would reverse-factor the instrument
• Supplier, on opting for reverse factoring, would get the discounted amount from the financier.
• Purchaser would pay the financier, in case the instrument is discounted, and the supplier otherwise, on the instrument due date.
• Financiers would have the facility to set up limits and discount rates for various credit ratings. The limits would be monitored and updated online as instruments get bid for/reverse-factored/funds repaid by purchaser.
• The funds transactions will be handled through RTGS/NEFT mechanism through participating financiers/banks.
Further to the above-mentioned models described above, including others that might be developed in future as an embodiment of the present invention, there is envisaged a set of further business models that build up on the underlying reverse factoring model.
In the said envisaged model, the debt obligations of the purchasers held by the financing entities would be securitized into investible instruments with multiple credit ratings. These instruments

will then be on offer to investors with suitable risk appetites. The model further proposes to develop a secondary market for the above described instruments.
The following sets forth a detailed description of an embodiment of the reverse factoring system - model 1 and should not be taken to be limiting of the invention itself. Rather, any number of variations may fall within the scope of the invention defined in the claims.
References in this document, before and henceforth, to 'an embodiment' or 'a model' means that a particular feature, structure, or characteristic described in connection with the embodiment is included in at least one embodiment of the invention. The appearances of the phrase 'in one embodiment'or 'in one model' in various places in the specification are not necessarily all referring to the same embodiment, nor are separate or alternative embodiments mutually exclusive of other embodiments. Moreover, various features are described which may be exhibited by some embodiments and not by others. Similarly, various requirements are described which may be requirements for some embodiments but not other embodiments.
The invention is of an electronic auction platform for invoice discounting. The platform as depicted in FIGURE 1 has three key participants viz. the financiers F through FEM, the purchasers P through PEM and the suppliers S through SEM and is operated by a platform operator PO which is an independent entity separate from the other participants on the platform AP.
The platform operator defines the criteria for empanelment of the different participants on the auction platform. It also specifies the documentation required for the different participants. The empanelment of participants is subject to fulfillment of pre-defined criteria as described earlier.
In one of the embodiments of the auction platform, the system functions as an automated auction platform in which financiers offer discount rates for the qualified instruments offered by the purchasers for discounting. In this system, financiers apply for listing on the platform (Refer FIGURE 2A for Empanelment). The platform operator then evaluates the financiers based on certain predefined criteria. Subject to the fulfillment of these criteria, the financiers are empanelled on the auction platform. An empanelled financier can then introduce purchasers on

the platform. Again, subject to the fulfillment of platform operator's criteria and the completion of operator specified documentation, these purchasers are empanelled on the system. Once empanelled, a purchaser is then evaluated by the financiers with respect to its credit rating (Refer Figure 2A). Discount rates and credit limits are then offered to the purchaser by the financier(s) based on this credit evaluation. Once limits are assigned to a purchaser by at least one of the financiers, the purchaser can proceed to presenting qualified instruments on the auction platform (Refer Figure 4B), During the auction session, the purchaser is able to view all the discount rates offered for it by the different purchasers. The purchaser can then discount its instrument at the best rate available.
The present invention is an implementation of the electronic auction system depicted in FIGURE 1. The implementation of the system is not restricted to a particular computer language but can be achieved using combination of one or more than one computer languages.
System administration and Entity management form the core functions of the platform operator.
Empanelment on the platform requires the entity to make an application for empanelment on the platform and furnish the relevant requirements. On compliance of the requisite criterion, entity will be on-boarded. The application may be rejected on the failure to meet the requirements set by the platform operator.
The platform operator also has the authority to deregister an entity from transacting on the platform if it bypasses the defined norms or the rationally acceptable terms of the conduct.
The system framework is defined and maintained by the platform operator. He sets the parameters for the auctioning mechanism which has been set as the mode of electronic discounting.
Additionally, the platform operator is to also maintain a notification system to alert or notify users. The notification system is to consist of the latest and the fastest communication media easily available. In one of the implementations, it consists of both a text message via mobile telephone system and an email sent to the concerned user(s). For example, a critical message could be in case of non-generation of payment files by the financiers before a set cutoff time, the system will automatically generate an alert to notify the concerned financier. A notification

message, for example, will be generated whenever a new user is added to the system. In this message the new user gets a welcome greeting along with his username and a password. Another notification, of a recurring category, would be of the daily obligations of the various parties, for which they would be notified via the system defined communication media.
Along with the notification system, the platform operator is to also maintain a reporting platform which will allow the various participants of the system, including those of the operator herself, to access reports based on the access controls set by their respective administrators.
The functions of Financier through FEM are described below:
Financier introduces the purchaser on the platform. Financier evaluates the credit worthiness of the purchaser & accordingly sets the credit limit and rate of discounting to be offered.
In the course of the offer having been extended, if the purchaser accepts the offer, the financier is obliged to make the payment to the supplier within the stipulated time frame.
On maturity, the financier has to duly close out the obligations on receipt of the payment from the purchaser.
The functions of Purchaser through PEM are described below:
The purchaser has to make an application of empanelment & furnish the necessary requirements to the platform operator.
Purchaser introduces the suppliers on the platform & maintains the supplier verification documents on behalf of the operator.
The purchaser is responsible for bringing in the qualified instruments for purpose of discounting. He is required to maintain the instruments in the physical form and produce the same on demand to the financier.
He chooses the best discount rate offered to him on the platform. The purchaser has the option to send the offer to supplier for selection of the discount rate or choose the offer himself. On choosing the purchaser has effectively entered into a transaction and generates an obligation.

On the payment having been made to his supplier by the financier, the purchaser is obliged to repay the invoice value and the discount amount to the financier on the due date.
The functions of Supplier through SEM are described below:
The supplier may be introduced by the purchaser on the platform or he may directly approach the platform operator for getting on the platform.
The purchaser may assign the discounting module to be executed by the supplier. The supplier reviews the instrument and exercises the options to offer the same for discounting. Where the supplier chooses to discount the instrument, he evaluates the discount rate offered by the financier. If the offer is acceptable to the supplier then he discounts the bills at that rate. The payment then stands due to the supplier from the financier account.
The electronic discounting system has several components in addition to the core system consisting of the electronic auctioning platform. These are
Review Mechanism - It incorporates the acceptance criteria for the different participants on the system. An application for empanelment is routed through the review mechanism that determines the eligibility based on the fulfillment of the defined criteria by the applicant entity.
Time Session Keeping Mechanism - It is a key component that maintains the open and close timings of the auction sessions. Additionally, the mechanism also maintains a holiday list that it uses to sync the auction calendar with the national holidays calendar.
Payment Management System - It maintains a complete record of obligations generated as a result of successful auctions. It also tracks the fulfillment of these obligations.
The system has been designed to function as an electronic discounting platform with several features that can be incorporated optionally to enhance the functionality of the system.
Guarantor Module -It analyses the historical transactions of the participants on the platform, with respect to the financial transactions and develops a dynamic rating for the purchasers and the financiers. The rating is based on timeliness of the fulfillment of the obligations.

Insurance Module - The insurance mechanism allows the insurance companies to insure the monetary risk incurred by the financiers while discounting purchaser instruments. This module allows the insurance entities to monitor the financier and purchaser transactions to determine the insurance levels.
Payment Gateway - The platform operator can chose to setup an independent payment gateway to process the pay-ins and pay-outs generated as a result of the electronic discounting.
FIGURE 2A illustrates Platform Operator Admin- Empanelment
Empanelment on the electronic reverse factoring platform is facilitated by the platform operator. The participants desirous of transacting through the platform are required to apply for empanelment, through an empanelment means, accompanied with the requisite supporting documents for verification of the eligibility to participate. The platform operator verifies and decides on the approval status. If the participant has complied with all the requirements, the platform operator makes record of the basic, banking and compliance details and intimates the participant with the system accessibility details. In case the participant fails to meet the criteria, the platform operator informs him about the rejection.
FIGURE 2B illustrates Platform Operator Admin- Entity Management
Once registered on the system, the entity level changes can be routed only through the platform operator. The participant desirous of editing his details, will forward a written request through the authorized person with the change details and documentary evidence supporting the change. This is facilitated by an editing means. The platform operator verifies the changes and if approves of the same effects it in the system. In case, the operator does not approve of the change, it intimates the sender of the same with reasons for disapproving the change.
FIGURE 2C illustrates Platform Operator Admin- Set System Parameters
The operating parameters are set and maintained by the platform operator using parameter setting means.

FIGURE 2D illustrates Platform Operator Admin- Manage Auction Calendar
The auctioning session timings and parameters are generated and maintained by the platform operator. All discounting has to be done within the set time periods,
FIGURE 2E illustrates Platform Operator Admin- Deregistration
For deregistering from the platform, the participant has to send a written request to the platform operator along with the supporting documents, through a deregistering means. The platform operator verifies the deregistration request and if the conditions are met, check for any outstanding obligations. In case there are any pending obligations, it intimates the participant for settlement. Once all obligations are settled the participant is deregistered from the system.
FIGURE 2F illustrates Platform OperatorAdmin - Maintain Admin User (Participants)
For editing the profile of the participant administrator, the request has to be routed through the platform operator with the supporting documents. On verification if the operator approves of the changes, the same is affected in system. In case the operator disapproves the change, the intimation of the same is sent to the participant with the reasons. FIGURE 3A illustrates Financier - Maintain Purchaser Limit
The financier conducts a credit analysis on the purchaser and sets the credit limit for the purchaser on the platform. The credit limit is valid for a particular instrument type and for a stated time period as set by the financier. The design of the platform accords a maker-checker rule. Accordingly the limit set by the maker has to verified and confirmed by another authorized person designated to perform the checker role. Only once the limit is approved by the checker it is activated.
FIGURE 3B illustrates Financier - Funds Pay-out
The financier obligations are generated by the system at the end of each auction session and intimated to him. He then proceeds to make the due payment to the supplier through RTGS.

FIGURE 3C illustrates Financier - Funds Pay-in
On maturity, the purchaser pays the financier the details for which have to be updated by the financier in the system. On the updating the repayment details, the purchaser limits in the system are released to that extent.
FIGURE 4A illustrates Purchaser - Maintain Supplier Links
The purchaser supplier link is created in the platform with the purchaser introducing the supplier and uploading his requisite details. The supplier information so entered has to be verified by authorized person designated for confirming the details. Once the details are verified and confirmed the supplier becomes active in the system.
FIGURE 4B illustrates Purchaser - Maintain Instruments
The purchaser is responsible for uploading qualified instruments in the system. The instruments are uploaded by one person and confirmed by another authorized person within the purchaser entity. The instrument can be factored only once approved at the checker level.
FIGURE 4C illustrates Purchaser - Send Instrument To Supplier
The purchaser has the option to send the instrument to the supplier for the purpose of discounting. The dynamics of the transaction remain unaltered sans the selection of the offer is by the supplier instead of the purchaser.
FIGURE 4D illustrates Purchaser - Select Offer
Once the qualified instrument is uploaded & confirmed by the purchaser entity the same is available for discounting. During the auction session the purchaser views the discount rate offered by the financier and if the same is acceptable he discounts the invoice at the stated rate.
FIGURE 4E illustrates Purchaser - Maturity Payment
On the due date of the invoice, the purchaser can view his obligation due & settle the same with the financier. If the purchaser fails to settle the due on the due date, he may be given grace period by the financier.

FIGURE 5A illustrates Supplier - Select Offer
Where the purchaser chooses to send the instrument for discounting to the supplier, the supplier views the rates offered and discounts the instrument at the best offer rate.
The entity level role creation and maintenance is done through the platform operator
FIGURE 6A illustrates Common - Maintain Roles
FIGURE 6B illustrates Common - Maintain Users
While considerable emphasis has been placed herein on the particular features of the preferred embodiment and the improvisation with regards to it, it will be appreciated that various modifications can be made in the preferred embodiment without departing from the principles of the invention. These and other modifications in the nature of the invention will be apparent to those skilled in the art from the disclosure herein, whereby it is to be distinctly understood that the foregoing descriptive matter is to be interpreted merely as illustrative of the invention and not as a limitation.

We Claim:
1. A reverse factoring based virtual central market place system adapted to provide a multichannel platform for displaying and auctioning regulated and reviewed instruments of financial value to a pre-defined consortium of financers, said system comprising:
- purchaser entry module adapted to allow at least a purchaser to deposit its purchase instrument for review and further for auctioning'
- review mechanism, in tune with pre-defined standards of market condition, adapted to categorise said purchaser's instrument;
- display means adapted to display the reviewed purchaser's instrument;
- auctioning platform adapted to provide a platform for auctioning at least said displayed purchaser instrument;
- supplier entry module to allow at least a supplier to enter the auctioning platform for facilitating selection of the best discounting rate for said supplier;
- multi-port financer entry module adapted for allowing at least a financer to read/study said displayed instrument, and raise a bid in relation to offering finance for said purchaser instrument;
- guarantor module adapted to provide a check mechanism of guarantee for purchaser's credit rating based on empirical data of previous purchase credentials and for financer's credit worthiness based on pre-defined parameters by said guarantor module;
- computational engine adapted to compute a winning financer bid by a financer; and
- insurer means adapted to allow an insurance agency to partake in the deal in order to provide a warranting monetary mechanism in order to back said guarantor module

2. A system as claimed in claim 1 wherein, said system includes a platform operator adapted to monitor the Functionalities of said auctioning platform.
3. A system as claimed in claim 1 wherein, said system includes time session keeping means adapted to time the bidding session for pre-defined periods of time.

4. A system as claimed in claim 1 wherein, said system includes guarantor module include a rating module adapted to negatively rates the financer upon dishonouring a bid, and further adapted to positively rates the financer upon honouring said bid.
5. A system as claimed in claim 1 wherein, said system includes customisation module adapted to define a time frame of the auctioning platform so that the obligation is on Purchaser to pay the Financier on the maturity date.
6. A system as claimed in claim 1 wherein, said system includes payment gateway adapted for facilitating said payment, as worked out by said virtual market place.
7. A system as claimed in claim 1 wherein, said system includes payment management service adapted to keep track of payables.
8. A system as claimed in claim 1 wherein, said system includes reporting mechanism adapted to allow various participants of the system, including an operator, to access reports based on the rules set by the platform operator and the access controls set by their respective administrators.
9. A system as claimed in claim 1 wherein, said system includes empanelment means adapted to allow the participants desirous of transacting through the platform to apply for empanelment, accompanied with the requisite supporting documents for verification of the eligibility to participate.
10. A system as claimed in claim 1 wherein, said system includes editing means adapted to allow a participant desirous of editing personal details.
11. A system as claimed in claim 1 wherein, said system includes parameter setting means adapted to set and maintain operating parameters by the platform operator.

12. A system as claimed in claim 1 wherein, said system includes deregistering means adapted to allow a participant to deregister from said platform.