The Reserve Bank of India (RBI) released its definitive guidelines regarding the Trade Receivables Discounting System (TReDS), streamlining the onboarding process for MSME sellers while allowing insurance companies and credit guarantee fund trusts to take on a greater role in facilitating transactions on the platform.

The initiative seeks to enhance the convenience of conducting business for MSMEs and promote increased involvement in TReDS.

TReDS is an established system aimed at easing the financing of trade receivables for MSMEs from corporate clients, government agencies, and public sector undertakings (PSUs). The platform unites different participants to upload, accept, bid on, discount, and settle invoices and bills, thus improving liquidity for MSMEs by providing timely access to working capital at competitive rates.

The RBI indicated that TReDS platforms must perform customer due diligence (CDD) on buyers and implement suitable measures to verify the authenticity of submitted invoices and bills.

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The central bank has instructed TReDS platforms to create validation systems to verify that sellers are authentic MSMEs and that funds are deposited solely into the seller's bank account. The initiative aims to enhance the speed and convenience of invoice financing access for small enterprises.

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Under the updated framework, funders can obtain insurance for TReDS transactions, as long as the MSME seller does not pay the insurance premium. Nonetheless, this type of credit insurance cannot be regarded as a means to mitigate credit risk for obtaining prudential advantages.

Moreover, funders can secure guarantees for factoring units — trade receivables represented by invoices or bills submitted by sellers or buyers — from any credit guarantee fund trust established by the Union government.

Concerning capital requirements, organizations aiming to obtain authorization for establishing and running a TReDS platform must uphold a minimum net worth of ₹25 crore. Current TReDS operators have until March 31, 2028, to fulfill this obligation.

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Presently, there are five TReDS platforms — A.TReDS, Receivables Exchange of India, Mynd Solutions, C2FO Factoring Solutions, and KredX Platform. As per RBI statistics, these platforms together funded 1,40,972 invoices valued at ₹29,869 crore in April 2026.