About Trade Receivables Discounting System:
- It 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: 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.
- Participants:
- Sellers, buyers, and financiers are the participants on a TReDS platform.
- Only MSMEs can participate as sellers in TReDS.
- Corporates, Government Departments, PSUs, and any other entity can participate as buyers in TReDS.
- Banks, NBFC – Factors, and other financial institutions, as permitted by the RBI, can participate as financiers in TReDS.
- 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).
