Trade Receivables electronic Discounting System (TReDS)

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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.
1. A.TREDS Ltd (Known as Invoicemart)
2. Receivables Exchange of India Ltd (RXIL)
3. Mynd Solutions (Known as M1 exchange)

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

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
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
What is the process flow of TReDs?
What is the rate of interest?
RoI: RLLR linked Rate

TReDS