Monday, April 6, 2020,

Receivables Exchange of India Limited

RXIL News & Events

Date Title
01-Apr-2020 Watch now awareness video by Reserve Bank Of India on TReDS!
26-Mar-2020 TReDS Route to Discourage Layoffs

The best way for the government to induce employers to not lay off workers rendered redundant by the Covid-19 slowdown and lockdown would be to provide greater working capital relief to small companies by operationalising and fully realising the potential of the Trade Receivables Discounting System (TReDS). It should adopt a carrot-and-stick approach. To ensure that large companies release the payments due to their small-scale suppliers without delay, they must be mandated to come on to the TReDS platform. Small suppliers raise their invoices on their large buyers, when both the buyer and the seller are on the platform, participating banks carry out factoring, that is, take over the bill collection from the small suppliers and pay them their dues upfront, with adiscount pegged to the creditworthiness of the large company that now owes the money to the bank.

Failure to come on to the TReDS platform should be treated as an offence, and incentives offered for compliance. This would sharply reduce the cost of working capital for small companies. The cost of financing is based on the risk profile of the large buyer. Small businesses would require less working capital — they would not have to wait for months to collect their dues, as has been the practice. Further, they would get their money from banks, far cheaper than their traditional, non-bank sources of funds. In bill discounting, recourse is on the small company, and the discount rate is based on the small company’s risk profile. There is no incentive, further, for the big company to pay up. Big companies have been reluctant to accept factoring. They must be forced to, including government-owned ones.

Payment of provident fund contributions by the State could be linked to being on TReDS and not laying off workers.


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02-Mar-2020 RXIL digitizes its MSME onboarding using Jocata GRID, trade receivables exchange platform

Receivables Exchange of India (RXIL) - country's first trade receivables exchange platform (TReDS) has implemented Jocata's proprietary platform Jocata GRIDTM to enable digital onboarding for MSMEs.

The platform provides a multi-channel, paperless, digital onboarding experience to MSMEs which enables them to access finance on the RXIL TReDS platform in a substantially shorter time.


Key features of this implementation include digital verification of entity and individual identifiers (viz: GST, PAN, UDIN), automated decisioning, auto-population of customer information and digital documentation.

Jocata GRIDTM is deployed on cloud and uses modular micro services driven framework, which ensures scalability and flexibility to add digital regulatory interventions like Video KYC.

"With Jocata's onboarding solution, prospective MSMEs will be able to complete their digital onboarding in a few minutes by visiting the RXIL website and furthermore RXIL's Relationship teams are equipped with a responsive web-enabled module to fulfill MSME digital onboarding, said Ketan Gaikwad, MD, and CEO of RXIL Ltd., on its successful launch.

"Given the growth that RXIL has witnessed in the last three years and the potential that lies ahead, it was imperative for us to launch a reliable and scalable digital solution to onboard our MSMEs. Jocata's solution provides us with that impetus and further build on the scale that we have already achieved," Gaikwad added.

"Our association with RXIL and the launch of this onboarding platform aligns with the need to help RXIL onboard SMEs at scale and meet the end SME users financing goals. We are very happy to see this initiative go live so quickly," said Prashant Muddu, CEO of Jocata.

This story is provided by NewsVoir. ANI will not be responsible in any way for the content of this article.

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13-Feb-2020 This Mumbai company helps SMBs finance invoices, has transacted Rs 3.3k Cr in 3 years


Micro, small, and medium enterprises (MSMEs) and small businesses are the backbone of the Indian economy but they face recurring challenges in receiving payments for the goods or services they supply. In other words, they struggle to convert trade receivables into liquid funds.

The Reserve Bank of India (RBI) decided to set up an institutional mechanism for financing these trade receivables. It released guidelines for setting up and operating a system known as Trade Receivables Discounting System (TReDS).

The TReDS would link MSME sellers, corporate buyers, and financiers (banks and NBFCs) on a common platform. It would facilitate discounting of invoices and bills of exchange.

The RBI then granted licences to three TReDS platforms: M1xchange, RXIL, and A.TReDS.

One of the first TReDS platforms to start operations was RXIL (Receivables Exchange of India Ltd).

It began operations in January 2017 and has discounted over 81,000 invoices, with the total transacted value crossing Rs 3,331 crore, says RXIL’s MD and CEO Ketan Gaikwad.

“We have 445 corporates (including PSUs), 1,521 MSMEs, and 35 banks and NBFCs on board,” he tells SMBStory.

Mumbai-headquartered RXIL is a joint venture between Small Industries Development Bank of India (SIDBI), the apex financial institution for promotion and financing of MSMEs in India, and National Stock Exchange of India Limited (NSE), the country’s premier stock exchange.

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12-Feb-2020 Water Green Shoots With Vital Credit

The economy is turning over a new leaf, or so claims FM Nirmala Sitharaman, who cites several green shoots. Higher foreign investment inflows, direct and portfolio, rising GST collections, faster accumulation of forex reserves and the buoyant stock market all indicate sanguine investor expectations but have accompanied quarter after quarter of slow growth. Only two of the shoots in question are genuinely green: rising Purchasing Managers’ Index for manufactures and for services. The way forward is to proactively policy-induce heightened credit offtake for trade and industry, including by streamlining the Trade Receivables Discounting System, or TReDS, a factoring service that has the potential to revolutionise trade credit for micro, small and medium enterprises (MSMEs).

Large corporates, government departments and public sector undertakings (PSUs) tend to delay payments to MSMEs, forcing these companies to borrow at usurious rates from informal credit markets. TReDS is supposed to boost the financing of MSME receivables by banks. In her budget speech, the FM had sought to amend Factoring Regulation Act, 2011, to enable non-banking financial companies (NBFCs) to extend invoice financing to MSMEs on TReDS; the move needs expediting.


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04-Feb-2020 GeM inks MoU with TReDS platform RXIL and Arteria Technologies

New Delhi, Feb 4 (KNN) The Micro Small and Medium Enterprises (MSMEs) will be benefitted as Government E Marketplace (GeM) has signed a Memorandum of Understanding (MoU) with TReDS platform RXIL and Arteria Technologies Pvt. Ltd.

Speaking on the ocassion, Ketan Gaikwad, CEO, RXIL Ltd., said, “Close to 53 per cent of transactions on GeM (Govt. E Marketplace) are initiated by MSMEs. Finance Minister announced during this year’s union budget to increase the turnover of GeM from the current levels of INR 50,000 crore to INR 3 lakh crore. For the proposed turnover mandate, it is necessary to have the alternate financing mechanism in place, the integration between Trade Receivables Discounting System (TReDS), and GeM as suggested in the UK Sinha Committee report will allow PSUs/Govt. departments to do procurement without blocking their own funds, while ensuring timely payments to MSMEs.''

''The MoU will immensely benefit, MSMEs and CPSEs/PSUs/Govt Departments while achieving the proposed goal of INR 3 lakh crore throughput,” he added.

he Economic Survey 2019-2020 stated that currently 57,531 MSME sellers and service providers are registered on the GeM portal. Central PSUs are required to procure at last 25 per cent of their total purchases from MSMEs and PSUs have procured 28.26 per cent of total procurement from MSMEs, crossing the minimum threshold of 25 per cent.

Gaikwad, further said that TReDS has become a stable payment system with over Rs 15,000 crore worth of throughput across the platforms. The government has seen the effectiveness of TReDS in ensuring a stable supply of credit to MSMEs, the MoU is a step in the direction of extending its benefit to a larger universe of MSMEs.

Sriram Kanuri, CEO, Arteria Technologies Pvt. Ltd., remarked on the landmark association as a proud moment.

''We are excited to extend the expertise and the existing association with TReDs by deploying FinessArt for GeM as well and support the Digital India journey and further the cause for MSME sector,'' he said.


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03-Feb-2020 Govt takes first step towards Rs 3 lakh crore-turnover target proposed in budget for its e-marketplace

Ease of Doing Business for MSMEs: GeM currently has 3.25 lakh sellers listed out of which 70,783 sellers are micro and small enterprises contributing 52.50 of the total order value on the platform.

Ease of Doing Business for MSMEs: Business-to-government e-commerce portal Government e-Marketplace (GeM) on Monday announced partnership with Trade Receivables Discounting System (TReDS) platform operator Receivables Exchange of India Ltd (RXIL) to help government departments, public sector units, CPSEs etc. to finance their payments to MSME sellers of goods and services. RXIL — a joint venture between SIDBI and National Stock Exchange is among the three licensees for operating the TReDS platform. Invoicemart and M1Xchange are the other two operators.

The development comes days after the Finance Minister Nirmala Sitharaman proposed increasing the turnover of GeM to Rs 3 lakh crore. “GeM is moving ahead for creating a unified procurement system in the country for providing a single platform for procurement of goods, services and works. It offers a great opportunity for MSMEs,” the minister had said. GeM currently has 3.25 lakh sellers listed out of which 70,783 sellers are micro and small enterprises contributing 52.50 of the total order value on the platform.

Financial Express -


31-Jan-2020 Government asks top PSUs to bring vendor network on TReDS

The government has ordered its top companies to bring in their entire vendor network comprising thousands of suppliers on to the TReDS, an electronic trading platform to trade receivables, as it aims to unclog the payment pipelines that’s squeezing funding for small enterprises

Hindustan Aeronautics, ONGCNSE 1.86 % and Indian OilNSE 0.38 % are among scores of firms that have been told by the Department of Public Enterprises to ‘register immediately’ their vendors on the network or face penal action, said people familiar with the matter.
“All CPSEs must ensure that the payments to MSE vendor be made using online mode within the stipulated time period of the contract and not more than 45 days in any case,” read the circular from the DPE. “Though a number of CPSEs have already registered on the TReDS portal, there are still some that are yet to register.” 

The government’s latest whip comes after small and medium enterprises began blaming non-payment by those companies that obtained supplies from them for their financial crunch.
Because of the delay in payments, small firms are not able to meet their working capital requirements and at the same time banks’ risk aversion has led to drying up of funds.

Finance minister Nirmala Sitharaman promised that the government would clear dues to vendors quickly as non-payment was pulling down economic growth to a multi-year low.
In a bid to make these transactions more transparent, the government had introduced TReDS for electronic settling of routine dues in 2017. Micro and small businesses on the same portal can also access working credit against the transaction invoice from banks registered on the platform.

According to the one of the CEOs of the three operating TReDS service providers, “majority of buyers register only for compliance purpose and without any intent to use the platform.” Several of these larg ..


30-Jan-2020 Right on, onward to universal factoring

The government has done well to ask all public enterprises to be present on an online trade receivables discounting platform and to make payments online. If there is one reform that can spell serious gain for small industry, financial inclusion and the exchequer, it is to make it an offence, with culpability pegged on the chief executive officer and members of the board, for large companies to either not enrol in a TReDS platform or, having registered, decline even a single transaction on the platform. TReDS is short for Trade Receivables Discounting System, an online platform on which small industry, large companies to which small companies supply goods, and banks interact to carry out factoring.

Factoring is, of course, different from and superior to bill discounting, from the point of view of the small company. When a small vendor raises a bill on a large company to which it supplies stuff, a bank might be willing to discount the bill and grant the company immediate liquidity. However, if the large company on which the invoice has been raised does not pay, the bank will penalise the small company, to which it lent money accepting the bill as collateral. In factoring, the bank takes on the responsibility for collecting the payment from the large company — the credit relationship is between Big Bank and Big Corp. The small vendor not just gets money upfront, but gets it cheaper, because the cost of financing is based on the risk profile of the large buyer, unlike in the case of bill discounting. If all small companies gain access to factoring, it would revolutionise trade credit. For that, services, too, must be enrolled and non-banking financial companies (NBFCs) that have expertise in dealing with tiny or niche clients must be roped in.

But the biggest challenge is to overcome the reluctance of the large buyers to accept factoring, and give up the freedom to bully their small vendors, a freedom they take for granted. The transparency TReDS payments bring would make GST collections boom — an incentive for the State to make this mandatory, and not just in form.


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27-Jan-2020 KASSIA organises an awareness program on TReDS to benefit MSMEs

Bangalore, Jan 27 (KNN) Karnataka Small Scale Industries Association (KASSIA) has organised a programme on Trade Receivables Discounting System (TReDS) for the benefit of Micro Small and Medium Enterprise (MSME) suppliers.

Speaking on the occasion, Ketan Gaikwad, Managing Director & CEO, Receivables Exchange of India Ltd., (RXIL Trade Centre), mentioned that the Government was extremely keen on ensuring that the delays in payments to MSMEs by the buyers are reduced as much as possible.

''This was necessary as the MSMEs form the backbone of the Country’s economy and their survival and growth is extremely important for the economic development of the Country,'' he added.

He also stated that the platform was slowly gaining the popularity and government had issued clear guidelines for buyers to onboard the platform adding that ''Government was closely monitoring the transactions on the platform to ensure the purpose for which it is set up is achieved.''

However, he remained optimistic that more and more MSMEs would participate in the TReDS platform so as to derive the maximum benefit from the platform.

The event also witnessed Siddalingappa B Poojari, Joint Director, District Industries Centre, Bangalore Urban, Ulagiyan Balasubramanian,  AGM, SIDBI and  Chandra Mouli, DGM, SIDBI.


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08-May-2019 SIDBI-ET India MSE Awards -2019

Applications are invited in Most Tech Savvy MSE, Women MSE Achiever, Best MSE Exporter, Best Employment Generating MSE and Most Innovative Entrepreneur. The Award is scheduled to be held in October 2019 in Mumbai. Pl. visit attached microsite. The awards have been launched and the micro-site ( inviting the applications has also gone live.




09-Jan-2017 TReDS platform of Receivables Exchange of India Limited goes LIVE on January 09, 2017.


08-Jan-2017 ‘TReDing’ the path to quick payments

The government’s demonetisation exercise has had an impact on liquidity of Micro, Small & Medium Enterprises (MSME) in the country, according to a recent nationwide survey by the global analytical company CRISIL.

“Every third MSME is also facing delays in receivables from clients, which has curbed their ability to repay creditors, and pay salaries, on time,” said the survey that covered more than 1,100 MSMEs between November 24 and December 24. “The steel sector was the most impacted on this score, with nearly two-thirds of respondents admitting to problems, followed by textiles, logistics and construction sectors,” CRISIL said.

There are about 51 million enterprises in the MSME segment in India. They have generated employment for about 117.1 million persons and accounted for 37.5 per cent of the country’s GDP, according to the MSME ministry. As per the Federation of Indian MSMEs (or FISME), a majority of MSMEs conduct their transactions, including sales, purchase and payments of wages, in cash and therefore their businesses have come to a “grinding halt” following the government’s surprise announcement on November 8 to withdraw notes in the denomination of 500 and 1,000 that accounted for 86 per cent of the currency in circulation in value terms in the country.

Informal funding unavailable

What is hurting MSMEs the most following demonetisation is the delay in receivables from big clients, that is the Centre/State governments & their agencies, public sector units and large private corporate entities. MSMEs are no strangers to such payment delays. According to a report published in September 2015 by Knowledge and News Network – a venture between FISME and GIZ (the German Agency for International Cooperation) – a study of the balance sheets of the top 2,700 non-MSME companies in India showed that “the biggest of Indian companies are holding on 10,000 crore due to micro & small enterprises against supplies made by them.”

FISME sources said, however, unlike earlier, MSMEs are now unable to fall back on informal sources of affordable finance particularly for their working capital as such funds have dried up due to the cash crunch after the demonetisation drive. Though the MSME Development Act addressed the issue of delayed payments to MSMEs by specifying that the buyer of goods or service will have to make payment to the (MSME) supplier within 45 days from the day of acceptance (or deemed acceptance), FISME sources said in reality this period stretches to an average of about 65 days and in some cases even up to 120-150 days. About 90 per cent of MSMEs rely on informal sources for credit, as per government estimates.

‘Demand for credit’

S.S. Mundra, Deputy Governor, Reserve Bank of India (RBI), had, in August 2016, referred to “a huge unmet demand for credit for MSMEs” saying, “As per provisional data for the period ended March 2016, total outstanding loan of the banking system to MSME sector stood at around 11.1 trillion in 20.6 million loan accounts. Contrast this to the estimated need of 26 trillion (or $520 billion of debt demand in the MSME sector) and the number of MSMEs at 51 million.” Mr. Mundra said there is a total finance requirement of 32.5 trillion ($650 billion) in the MSME sector - an amount comprising 26 trillion ($520 billion) of debt demand and 6.5 trillion ($130 billion) of equity demand. ‘Raghuram Rajan, in July 2016 while he was the RBI Governor, had said, MSMEs get squeezed all the time by their large buyers, who pay after long delays. All would be better off if the MSME could sell its claim on the large buyer in the market. The MSME would get its money quickly, while the market would get a claim on the better-rated large buyer instead of holding a claim on the MSME.”

Mr. Rajan said all this would happen when the three Trade Receivables Discounting Systems (TReDS), which the RBI has licensed, start later this (2016-17) financial year. “The key is to reduce transaction costs by automating almost every aspect of the transaction so that even the smallest MSMEs can benefit,” he had said.

In his speech announcing the Budget 2015-16, finance minister Arun Jaitley pointed out that a significant part of the working capital requirement of an MSME arises due to long receivables realisation cycles. “We are in the process of establishing an electronic TReDS financing of trade receivables of MSMEs, from corporate and other buyers (including government departments and state-owned enterprises), through multiple financiers. This should improve the liquidity in the MSME sector significantly,” Mr. Jaitley had said. According to Mr. Mundra, the objective of TReDS is to create Electronic Bill Factoring Exchanges that could electronically accept and settle bills so that MSMEs could encash their receivables without delay. When he took over as the RBI governor in September 2013, Mr. Rajan had said the RBI “intends to facilitate Electronic Bill Factoring Exchanges, whereby MSME bills against large companies can be accepted electronically and auctioned so that MSMEs are paid promptly.” He said this was a proposal in the report of his Committee on Financial Sector reforms in 2008, and that he intended to see it carried out.

In March 2014, the RBI had brought out a ‘concept paper’ on ‘Trade Receivables and Credit Exchange for Financing MSMEs’ and had sought feedback from stakeholders. In this regard, the concept paper detailed the well-recognised model of the Mexican Development Bank that runs a programme based on reverse factoring to facilitate the liquidity and financing requirements for MSMEs in Mexico. As per the paper, India has a similar initiative - the SIDBI-NSE Trade Receivable E-discounting Engine (NTREES), a web-based platform established in December 2009 for e-discounting of receivables of MSMEs. After seeking comments on the draft TReDS guidelines in July 2014, the RBI, in December 2014 announced the final guidelines and said the TReDS would be an authorised payment system subject to the RBI’s oversight under the Payment & Settlement Systems Act, 2007.

Noting that the TReDS will give MSMEs greater access to finance and put greater discipline on corporates to pay their dues on time, the RBI in November 2015 granted in-principle nod to three applicants, NSE Strategic Investment Corp-SIDBI, Axis Bank and Mynd Solutions to establish and run TReDS. The other applicants were Trade Receivables Exchange (Group of Banking Professionals)-Mumbai, DICIC Bank of India-Kolkata, NSDL Database Management Ltd-Mumbai and Trade Receivables Exchange-Mumbai. Since the TReDS will not be allowed to assume any credit risk, its minimum paid up equity capital shall be 25 crore, the RBI had said.

According to Mr. Mundra, “It would be important that the use of TReDS is made mandatory for, to begin with, corporate and PSUs and later for the Government departments.” He had asked the industry chambers and the MSME Ministry to “proactively examine this aspect as success of the TReDS initiative can be a game changer for the sector.”

Stakeholders’ key role

Ajay Kumar Kapur, Deputy Managing Director, SIDBI and on the board of Receivables Exchange of India Ltd (or RXIL – the NSE Strategic Investment Corp-SIDBI joint venture), said while SIDBI and NSE are the promoters of RXIL, a major factor that can lead to its success is that its stakeholders include SBI, ICICI Bank and Yes Bank.

These banks accounted for a sizeable portion of the credit to the MSME sector, and therefore had a good understanding of MSMEs and their clients, he said. SBI Caps and ICICI Securities are reported to be among the other investors in RXIL. Mr. Kapur said RXIL has got the RBI approval and will start operations soon. Meanwhile, FISME, in its proposals for consideration for the Union Budget 2017-18, said TReDS can be purposeful only if legislative backing is extended to it, making it necessary that the invoices are uploaded mandatorily and status of deemed acceptance is granted to them to convert them into negotiable financial instruments.

“This will not only provide much needed liquidity to MSMEs but will also usher in financial discipline in corporates and PSUs which is equally important for the country’s financial system,” FISME said.

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06-Dec-2016 RXIL gets RBI nod for 1st trade receivables exchange platform

The Reserve Bank has authorised the Receivables Exchange of India Limited (RXIL), promoted by SIDBI and NSE, to launch the country's first trade receivables exchange platform for MSMEs, buyers and financiers.


Promoted by SIDBI, the apex financial institution for promotion and financing of MSMEs and the National Stock Exchange, RXIL has SBI, ICICI Bank, Yes Bank, SBI Caps, and ICICI Securities as other investors.


The RBI nod came in on December 1, RXIL said in a statement today.


The RBI had last year granted in-principle approval to three applicants to launch such an online platform, including the SIDBI-NSE joint venture, RXIL said, adding this makes it the first to receive the authorization to launch the platform.

The trade receivables discounting systems (TReDS), an automated system driven platform is expected to benefit MSMEs by facilitating them to auction their trade receivables at competitive market rates through transparent bidding process on the platform by multiple financiers.

The TReDS will be the first attempt in the country to introduce factoring without recourse and help not only quick realisation of receivables but also appropriate price discovery.

SIDBI Chairman Kshatrapati Shivaji said this initiative is the continuum of series of its efforts in addressing gaps in the MSME ecosystem.

He noted that in early 1990s, SIDBI piloted the receivable financing scheme in reverse factoring process to address the delayed payments problem of MSMEs.



06-Dec-2016 RXIL - A SIDBI-NSE Initiative to Launch India’s First TReDS Exchange

Reserve Bank of India has on December 1, 2016 authorised Receivables Exchange of India Limited (RXIL) to launch India’s first trade receivables exchange platform – an online marketplace for MSMEs, Buyers and Financiers. RXIL has been promoted by SIDBI, the apex financial institution for promotion and financing of MSMEs in India and National Stock Exchange of India Limited (NSE) the premier stock exchange in India. SBI, ICICI Bank, YES Bank, SBI Capital Markets Ltd., and ICIC Securities Ltd., are the other joint investors. RBI last year granted in principle approval to three applicants to launch the platform including the joint venture of SIDBI and NSE. RXIL, the company promoted by SIDBI and NSE is the first among the three applicants now to receive the authorisation to launch the platform.

The Trade Receivables Discounting Systems (TReDS), an automated system driven platform is expected to benefit MSMEs by facilitating them to auction their trade receivables at competitive market rates through transparent bidding process on the platform by multiple financiers. TReDS will be the first attempt in India for introduction of factoring without recourse and help not only quick realisation of receivables but also appropriate price discovery.

Dr. Kshatrapati Shivaji (IAS), Chairman and Managing Director, SIDBI said that this major initiative is the continuum of series of SIDBI’s efforts in addressing the gaps in the MSME ecosystem. Dr. Shivaji reiterated that SIDBI way back in early nineties piloted the Receivable Financing Scheme [RFS] in reverse factoring process in India for addressing the delayed payments problem of MSMEs. SIDBI through the Scheme has demonstrated how credit profile of large corporates could be leveraged for bringing down the cost of financing of receivables of MSMEs with more than 23000 registered MSME beneficiaries.

Taking forward, SIDBI and NSE joined together later to launch web based discounting platform viz. NTREES with SIDBI as a single financier on the lines of NAFIN model in MEXICO. TReDS in a way is a graduation of NTREES operations envisaging multiple financiers. Dr. Shivaji hoped that the TReDS platform would compliment the other major digital initiatives by SIDBI viz.,, and He added that these portals addressed to help meet most of the requirements of all the aspirants viz. be it startups, first time entrepreneurs and small enterprises through online connection of all the stakeholders in the form of market place. On successful implementation of GSTN next year, he hoped that the entire canvas of mercantile/commercial transactions in India could be digitised in full form.

While SIDBI brought in its expertise spanning two decades on the subject for MSME finance and factoring operations, NSE came in with its technical expertise in managing exchange operations to commence the TReDS platform successfully.

“NSE has always been on the forefront of innovation and has played a catalytic role in reforming the Indian capital markets. As an exchange we have been focussing on the growth of SMEs in India. To support this, NSE launched the NTREES – an online bill discounting platform jointly with SIDBI in 2009 and subsequently launched EMERGE– a platform for listing growing SME companies to meet their capital requirements. With the approval to launch the TReDS platform, NSE will further support the growth of SMEs in the Indian economy” said Mr. J. Ravichandran, CEO Incharge, NSE.

Banks will benefit by financing the trade receivables of MSME Sellers as RBI has allowed them Priority Sector Lending benefits on the factoring units financed on TReDS platform. Corporates will also benefit through reduced input cost of goods and servicesby facilitating the MSME Sellers to get financed at competitive market ratesand allow them to efficiently manage their cash flows; while complying with the MSMED Act, 2006. RXIL’s TReDS supports both factoring (single seller with multiple buyers) and reverse factoring (single buyer with multiple sellers).

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18-Jul-2016 TReDs expected to roll out later this fiscal: Raghuram Rajan

Reserve Bank of India Governor Ragharam Rajan today said the Trade Receivables Discounting System (TReDS) is expected to roll out later this fiscal while the Bharat Bill Payments System (BBPS) will be launched shortly.

"Bharat Bill Payments System (BBPS) has been put in place to address the needs of the large bill payments market, to provide convenience of anytime, anywhere, any bill payment facility to the users. It is expected to roll out shortly," Rajan said while addressing at an awards function organised by Institute for Development and Research in Banking Technologies.

"Another significant area of development has been the Trade Receivables Discounting System (TReDS) which ought to be a game-changer for meeting the financing needs of Micro, Small and Medium Enterprises (MSME) segment.

"MSMEs get squeezed all the time by their large buyers, who pay after long delays. All would be better off if the MSME could sell its claim on the large buyer in the market. The MSME would get its money quickly, while the market would get a claim on the better rated large buyer instead of holding a claim on the MSME. All this will happen as the three Trade-Receivables Discounting Systems (TReDS) which the RBI has licensed, start later this financial year," he said.

The RBI chief also said the key is to reduce transaction costs by automating almost every aspect of the transaction so that even the smallest MSMEs can benefit.

Speaking about the recent development in payment systems in the banking industry, the Governor said, "the RBI would like payment mechanisms to be cheap and scalable, so that they are suited to India's economy where ticket sizes are small but transaction