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TReDS

 

  1. What is TReDS?

    Re: Trade Receivables electronic Discounting System (TReDS) is an online electronic platform and an institutional mechanism for factoring of trade receivables of MSME sellers. It enables discounting of invoices through an auction mechanism to ensure prompt realisation of trade receivables.​

  2. How many TReDS platforms are there currently?

    Re: There are three platforms registered with RBI for operating as a TReDS platform and Bank of Maharashtra has Tie up with all of them.​

    1. A.TREDS Ltd (Known as Invoicemart)
    2. Receivables Exchange of India Ltd (RXIL)
    3. Mynd Solutions (Known as M1 exchange)
  3. Who are required to register on the platform?

    ​​​ Re:

    Participants

    Eligibility

    Buyer

    Corporates including companies and other buyers including Government Departments and Public Sector Undertakings and such other entities as may be permitted by the RBI

    Seller

    MSME entities as per the definition of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).

    Financier

    Banks, NBFC Factors, Financial Institutions and such other Institutions as permitted by the RBI

  4. What are the documents required for registration?

    ​​​ Re: The documents required are as follows:

    1. Application Form
    2. KYC Documents of the Applicant Entity

      PAN

      Certificate of Incorporation

      Memorandum & Article of Association

      Address Proof of the registered entity

    3. KYC Documents of the promoters, administrators, authorised signatories, etc.
    4. Designated bank related documents
    5. Master Agreement
    6. Bank confirmation letter
  5. What are the Key benefits of TReDS?

     Re: Following are the key benefits of TReDS platform 

    1. All Participants

      Automated transparent platform

      Paperless and hassle free

      Cost Reduction

    2. Benefits to Sellers

      Competitive price discovery

      Without recourse to Seller

      MSMEs have the right to choose the best bid

      Payment received on T+l on successful auction

      No follow-up with the buyers for payment

      Not dependent on single financier

      Enhanced productivity and efficient liquidity management

      widening the financing options

    3. Benefits to Buyers

      Compliant with MSMED Act, 2006

      Can negotiate better terms with MSME Vendors

      Lower cost of inputs for Buyers

      Lower administrative cost

      Can avail extended credit period

      Competitive Price Discovery

      Efficient cash-flow management

      Ensure that their vendors are not strapped for cash / working capital

  6. What is the process flow of TReDs?

    *

  7. What is the rate of interest?

       Tenor Based MCLR