- 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.
- 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.
- A.TREDS Ltd (Known as Invoicemart)
- Receivables Exchange of India Ltd (RXIL)
- Mynd Solutions (Known as M1 exchange)
- Who are required to register on the platform?
Corporates including companies and other buyers including Government Departments and Public Sector Undertakings and such other entities as may be permitted by the RBI
MSME entities as per the definition of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).
Banks, NBFC Factors, Financial Institutions and such other Institutions as permitted by the RBI
- What are the documents required for registration?
Re: The documents required are as follows:
- Application Form
- KYC Documents of the Applicant Entity
Certificate of Incorporation
Memorandum & Article of Association
Address Proof of the registered entity
- KYC Documents of the promoters, administrators, authorised signatories, etc.
- Designated bank related documents
- Master Agreement
- Bank confirmation letter
- What are the Key benefits of TReDS?
Re: Following are the key benefits of TReDS platform
- All Participants
Automated transparent platform
Paperless and hassle free
- 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
- 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
- All Participants
- What is the process flow of TReDs?
- What is the rate of interest?
Tenor Based MCLR