Frequently Asked Questions (FAQs) – from users interested in the world of TReDs to MSMEs interested in becoming a part of the world of invoice discounting through RXIL. Questions and answers related to TReDS,
TReDS registration, factoring, RXIL workings, among others.
1. What is TReDS?
TReDS refers to Trade Receivable Discounting System. TReDS is being setup as per the RBI guideline issued on December 3, 2014. It is an online electronic platform and an institutional mechanism for financing / factoring of trade receivables of MSME Sellers against Corporate Buyers, Govt. Departments and PSUs.
RXIL, a joint venture between National Stock Exchange of India Limited (NSE) and Small Industries Development Bank of India (SIDBI) has been authorised by Reserve Bank of India (RBI) to operate the TReDS platform. The main objective of the TReDS platform is to address the financing needs of MSMEs as well as the delayed payments issue.
2. Who can participate on the TReDS platform of RXIL?
The following categories of participants can join the TReDS platform.
|Sellers||MSME entities as per the definition of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”)|
|Buyers||Corporates including companies and other buyers including Government Departments and Public Sector Undertakings and such other entities as may be permitted by the Reserve Bank of India (RBI)|
|Financiers||Banks, NBFC Factors, Financial Institutions and such other institutions as may be permitted by RBI from time to time|
3. Will TReDS Platform support invoices for manufacturing sector only?
The TReDS platform will support not only invoices raised by MSMEs in the manufacturing sector but also for the service sector as per the MSMED Act, 2006.
4. What is the eligibility criteria for MSMEs to join the TReDS platform as a Seller?
The eligibility criteria for MSME enterprises to join the TReDS platform as Sellers are given below:
Manufacturing Enterprises and Enterprises rendering Services
|Investment in Plant and Machinery or Equipment|
|Micro||Not more than Rs.1 crore and Annual Turnover ; not more than Rs. 5 crore|
|Small||Not more than Rs.10 crore and Annual Turnover ; not more than Rs. 50 crore|
|Medium||Not more than Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore|
5. What is Factoring?
In case of Factoring, the Seller initiates the process of financing of trade receivables and generally bears in the interest or financing cost.
6. What is Reverse Factoring?
In case of Reverse Factoring, the Buyer initiates the process of financing of trade receivables of Sellers. The Buyer may or may not bear the interest or financing cost as may be agreed between the Buyer and Seller.
7. Complaints & Grievance
1. Which complaints/ grievances will be covered under this Mechanism?
Ans: Only complaints/ grievances pertaining to RXIL TReDS platform will be covered under this Mechanism and the following will not be part of the Mechanism:
- Any complaint/ grievance/ disagreement/ dispute between the seller and the buyer – including in relation to any goods or services provided by the Seller to the Buyer
- Non-performance of any respective obligations of the seller or the buyer in relation to any transactions undertaken on the TReDS platform
- Non-performance of any respective obligations between the buyer and the financier
All such disputes or proceedings should be resolved outside the TReDS platform without any reference or recourse to RXIL.
2. What are the contact details for addressing complaints/ grievances relating to RXIL TReDS platform?
Ans: The grievances can be sent to:
- Nodal Officer, Receivables Exchange of India Limited
- I-Think Techno Campus, 701- 702, 7th floor, Supremus,Kanjurmarg East,
- Mumbai, Maharashtra 400042
- Tel No. 022 6903 3000
- Email id: firstname.lastname@example.org
3. What are the mandatory details required for lodging investor’s complaint/ grievance?
- name of the complainant
- area of complaint
- specific instances of the cause of grievance / complaint
4. What is the procedure for filing the complaint / grievance?
- Party registered on RXIL platform having complaint/ grievance shall submit the grievance to RXIL Nodal Officer through email/ written letter.
- Auto response email quoting unique ticket number will be sent to the complainant. In case of written complaint, acknowledgement will be sent within five (5) working days of receipt by quoting unique ticket number.
- Action will be initiated immediately to have the grievance resolved within a maximum period of three weeks.
- In case of dissatisfaction, the complainant can escalate the grievance to Chief Operating Officer (COO) of the Company for further action / resolution. The escalated complaints will be redressed by the COO within a period of five (5) working days.