PR No. 2026-2027/48; Dated: 08.04.2026
The Reserve Bank of India (RBI) has issued draft directions for the ‘Trade Receivables Discounting System (TReDS)’, proposing a comprehensive regulatory framework for platforms facilitating financing of trade receivables.
1. What is TReDS?
A Trade Receivables Discounting System (TReDS) is:
- A digital/electronic platform
- Designed to facilitate financing of trade receivables
- Enables factoring of receivables through multiple financiers
This helps improve liquidity for businesses, especially MSMEs.
2. Objective of the Draft Directions
The framework aims to:
- Strengthen the digital infrastructure for receivables financing
- Promote efficient and transparent financing mechanisms
- Enhance access to credit for suppliers and MSMEs
3. Key Areas Covered in the Draft
3.1 Authorisation of TReDS Platforms
- Specifies eligibility and approval requirements
- Entities must obtain authorisation from RBI to operate TReDS
3.2 Capital Requirements
- Prescribes minimum capital norms
- Ensures financial stability and operational resilience of platforms
3.3 Governance Framework
Establishes standards for:
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- Management structure
- Board oversight
- Risk management practices
3.4 Scope of Activities
Defines permissible activities, including:
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- Uploading and acceptance of invoices
- Bidding by financiers
- Discounting and settlement processes
3.5 Reporting Requirements
- Mandates periodic reporting to RBI
- Ensures transparency and regulatory monitoring
4. Conclusion
The draft directions aim to create a robust, transparent, and well-governed ecosystem for receivables financing, strengthening TReDS as a key enabler of working capital access and financial inclusion.
Click Here To Read The Full Press Release
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