Summary: The Trade Receivables Electronic Discounting System (TReDS) is an online platform designed to help MSME sellers receive early payments by discounting their trade receivables. This system improves cash flow and reduces the waiting period for payments from buyers. As per the Gazette notification (S.O.- 4845E) dated November 7, 2024, all companies with a turnover exceeding ₹250 crore must register on the TReDS platform by March 31, 2025.
The TReDS platform involves three key participants:
- Buyers (corporates, government departments, PSUs)
- Sellers (MSMEs registered under the MSME Development Act, 2006)
- Financiers (banks, NBFCs, and financial institutions approved by RBI)
Major RBI-registered platforms for TReDS include RXIL (Receivable Exchange of India Ltd.), M1 Exchange, and Invoicemart. These platforms charge an annual registration fee ranging from ₹5,000 to ₹30,500, along with transaction charges of 0.25% to 0.30% per annum. The registration process involves submitting KYC documents, financial statements, board resolutions, and agreements based on platform requirements. By facilitating timely payments, TReDS enhances liquidity for MSMEs while ensuring that large businesses comply with government mandates to improve financial discipline.
1. What is TReDS?
TReDS i.e. Trade Receivables Electronic Discounting System is an online platform which provides facility of discounting of Trade Receivables to MSME Sellers and reduce the time line of realization of money from the buyer.
Notification : As per the Gazette notification S.O.- 4845E dated 7.11.2024, all companies with a turnover of more than Rs 250 crores are required to get themselves on boarded on the Trade Receivables Discounting System (TReDS) platform by 31st March 2025.
2. What is the purpose of registering on TReDS?
It helps in better management of Cash Flow and improves the working capital of the company. The Seller need not to block their money for 45 days or more. They can easily discount the bill from the financiers and get their money with few days and the buyer need not to pay the amount of goods on an earlier basis.
3. Participants who are eligible for registering on TReDS
- Buyer – It includes corporate, sole proprietors, Government Departments, Public Sector Undertakings etc.
- Seller – All the MSME (Micro, Small, & Medium Enterprise) who are registered under MSME Development Act, 2006
- Financiers – Banks, NBFC’s, Financial Institutions and other Institutions as permitted by Reserve Bank of India.
4. Some Platforms who are registered with RBI are as follows:-
- RXIL (Receivable Exchange of India Limited)
- M1 Exchange (Mynd Solutions)
- Invoicemart (A TReDS ltd.)
| S.No | Documentations | ||
| RXIL | Invoicemart | M1 Exchange | |
| 1. | Board Resolution | Board Resolution | Board Resolution |
| 2. | Beneficial Owner Declaration Form | Beneficial Ownership Declaration Form | Beneficial Ownership Declaration Form |
| 3. | Master Agreement | Master Agreement | Master Agreement |
| 4. | Application Form | Application Form | Application Form |
| 5. | Company PAN Card | KYC of Authorised Signatory ( Passport size photo, PAN card + AADHAR copy) | Authority Letter |
| 6. | PAN Card copy of Individuals | Auditor Annual Reports for last 3 Years | NACH Mandate |
| 7. | Address Proof/ Aadhaar Card | Latest Bank Statement | PAN Card , Aadhaar Card, Passport |
| 8. | Cancelled Cheque Copy | Cancelled Cheque | Credit Rating Report |
| 9. | Auto Debit Mandate/ Bank Mandate | NACH Mandate | Annual Report Last three year’s |
| 10. | GSTN Certificate | Email Indemnity Letter (format attached) | |
| 11. | AOA & MOA | KYC of the Company (MOA-AOA, COI, PAN card, Address proof, TIN, GST details, Please provide List of Directors along with DIN on letter head of the company, which should match with the one appearing on ROC site) | MOA,AOA,COI, List of Directors with requisite details in
Letter Head of the company (Name, Father Name, DOB, DIN, Address, PAN, Aadhaar, Shareholding pattern) |
| 12. | COI | Latest Share holding Pattern | All necessary documents |
| 13. | List of Directors as per MCA | List of Directors & Senior management | |
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| RXIL Fee Details – RXIL Annual Fee – Rs. 25,000 GST (18%) – Rs. 4,500 Total – Rs. 29,500 Stamp paper – Rs.1000 (if taken from RXIL) Total Annual Cost + Stamp paper Cost – Rs. 30500 |
Transaction charges-0.30% p.a.
Account holder name — Receivables Exchange of India Limited
Bank Name — ICICI Bank Ltd, Nariman Point Branch, Mumbai
Account Number — 000405111948
IFSC Code — ICIC0000004
RXIL GST Number- 27AAHCR6707P1ZP- for reference
M1 Exchange Fee Details –
SBW Udyog limited (Buyer corporate) – 25000 plus gst
Renewal Fees Per Year (Buyer) – NIL
MSME vendor (Supplier) – 5000 plus GST
Annual fee (yearly)
(Buyer corporate) – Nil
MSME vendor (Supplier) – NIL
Products – Reverse Factoring buyer bearing Interest, Factoring and Mutual Interest occurring
Transaction charges – 0.25% per annum per transaction on a pro rata basis for funded amount+ GST
Invoice mart Fee Details – Annual Fee – Rs. 25,000+ GST
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