Trade Receivables Discounting System (TReDS) Platform : RBI
The Reserve Bank on Wednesday expanded the trade receivables discounting system (TReDS) by permitting insurance companies to function as participants.
- Trade Receivables Discounting System (TReDS) platform is an electronic platform for facilitating the financing/discounting of trade receivables of Micro, Small, and Medium Enterprises (MSMEs) through multiple financiers.
- These receivables can be due from corporates and other buyers, including Government Departments and Public Sector Undertakings (PSUs).
- Purpose is to allow MSME sellers to discount invoices raised against major corporations, which helps them manage their working capital demands.
- The platform enables MSMEs to receive payments more quickly.
- RBI has not made it compulsory for any buyer, seller, or financier to participate in TReDS.
- The Government has made it compulsory for certain segments of companies to mandatorily register as buyers on the TReDS platform(s).