Trade Receivables Discounting System

Recently, the Reserve Bank of India (RBI) expanded the trade receivables discounting system (TReDS) by permitting insurance companies to function as participants, a move aimed at improving the cash flows of MSMEs.

About TReDs

  • TReDS is an electronic platform facilitating the financing/discounting the Trade receivables of the 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).
  • This scheme was introduced by RBI to meet the liquidity crisis of the MSMEs by providing a mechanism for financing their trade receivables.

Key Features

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