While migrating from existing MSME registration or applying for New Udyam Registration there is one question that has been asked, “Whether you want to get registered at TReDS Platform?” Have you thought about it what TReDS is?

Here is our small article explaining TReDS.

What is TReDS?

TReDS stands for Trade Receivables Discounting System. Delayed payments from clients, including large firms and sometimes even government units, have been a persistent problem for the country’s small businesses. While large businesses may also face similar problems, smaller firms find it tougher to get the working capital needed to tide over a period of delayed payments. To address this problem, the Reserve Bank of India proposed the Trade Receivable Discounting System in 2015. TReDS is an online exchange being set up under the approval of the Reserve Bank of India (RBI) to facilitate discounting of invoices and Bills of Exchange on a PAN India basis.

The major problem faced by MSMEs is not having sufficient working capital. The TReDS will facilitate the discounting of invoices and bills of exchange. It provides MSMEs working Capital at competitive rates through an open bid process.

The Key participants to be “MSME” (The Seller), large corporates including PSUs and Government Departments (The Buyer), and Banks/NBFCs (The Financiers).

Objectives of TReDS

The main objectives of TReDS are to providing working capital to MSMEs and reducing the cost of operations. With this, the liquidity for MSMEs will be improved significantly. It is mandatory for all Public sector units to register on the TReDS platform.


  • To the Suppliers
  1. Easy, Fast Working, Capital Finance at cheaper interest rates
  2. Without non- collateral-based finance
  3. One time documentation, no need to engage with multiple banks
  4. Easy receipt of funds within 2 working days from acceptance
  • To the Buyers
  1. Saving on procurement cost through improved negotiation of financing terms with suppliers
  2. Saving on finance cost by extending the credit period
  3. Digital platform- Low administration cost for vendor financing, payments, and settlements
                 ©Pratima Gupta & Co.|| All Rights Reserved

Leave a Reply

Your email address will not be published. Required fields are marked *