RBI Releases Draft Treds Directions For Msmes, Seeks Public Feedback By May 1

(MENAFN- KNN India) New Delhi, Apr 9 (KNN) The Reserve Bank of India (RBI) has released draft directions for the Trade Receivables Discounting System (TReDS) on Wednesday, aiming to streamline and harmonise existing regulations to improve access to finance for Micro, Small and Medium Enterprises (MSMEs).

The draft, titled Reserve Bank of India (Trade Receivables Discounting System) Directions, 2026, follows a comprehensive review of earlier guidelines.

Stakeholders and the public have been invited to submit comments by May 1, 2026.

Key Reforms Proposed

The draft directions propose several measures to enhance efficiency and participation on TReDS platforms, including streamlined capital norms for authorised entities aligned with other non-bank payment system operators, a simplified onboarding process for MSME sellers to improve accessibility, and credit support mechanisms enabling financiers to avail credit guarantee cover for exposures on TReDS.

Regulatory and Governance Framework

Entities operating TReDS platforms must be companies incorporated in India and authorised under the Payment and Settlement Systems Act, 2007. A minimum net worth of ₹25 crore has been prescribed, to be maintained on an ongoing basis.

The draft also lays down 'fit and proper' criteria for directors, covering integrity, financial soundness, and regulatory compliance.

Operational Guidelines for Platforms

The directions also define the roles of key participants, including MSME sellers, buyers, financiers, insurance companies, and National Credit Guarantee Trustee Company Limited.

TReDS platforms will be required to ensure the authenticity of invoices uploaded for financing, facilitate seamless discounting and settlement of receivables, mandate buyers' unconditional obligation to pay on due dates once invoices are accepted, and conduct due diligence of participants in line with KYC norms.

All transactions on TReDS will be“without recourse” to sellers, meaning the repayment risk rests with buyers.

Enhanced Risk Mitigation and Transparency

The draft allows financiers to use insurance and credit guarantee mechanisms, though insurance premiums cannot be charged to MSMEs. It also enables re-discounting of receivables among financiers, improving liquidity in the system.

Platforms will be required to ensure proper registration of receivable assignments with central registries and maintain custody of all agreements.

Reporting and Compliance Requirements

Authorised entities must submit periodic reports to the RBI, including audited net-worth certificates and cyber security audit reports conducted by CERT-In empanelled auditors.

With the issuance of the new Master Direction, earlier guidelines on TReDS issued since 2014 will be repealed, though existing approvals and actions will remain valid.

(KNN Bureau)

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