Trade Receivables Discounting System (TReDS)

Trade Receivable Discounting System (TReDS) is working as per the guidelines issued by RBI. It is an electronic platform for facilitating the discounting of trade receivables of MSMEs through multiple financiers.
Government of India has also instructed Central Public Sector Enterprises and all companies with a turnover of Rs. 500 Crore or more to get themselves on-boarded on TReDS.
It is for facilitating the financing of trade receivables of MSMEs from corporate buyers through multiple financers and is called TReDS.
It includes discounting of both invoices as well as Bills of Exchange.
MSME sellers, Corporate Buyers and Financiers - both banks and Non-banks will be direct participants in TReDS.
It would be governed by a regulatory framework put by RBI under the Payment and Settlement Systems Act, 2007.
Who can participate? Whoever has the Capital of Rs. 100 crores out of which at least 40% must belong to promoters themselves for 5 years. Then it is to be reduced to 30% within 10 years and 26% within 12 years.

Source: PIB

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