TReDS: RBI’s bill discounting mechanism tops 1,500-company registration mark; up 5x in nearly 18 months

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Updated: June 09, 2021 3:39 PM

TReDS was introduced in 2014 by the central bank and later in 2017, three platforms including M1Xchange promoted by Mynd Solutions, Invoicemart (joint venture of Axis Bank and mjunction services), and RXIL (joint venture between SIDBI and NSE) were issued licenses to operate on TReDS mechanism

SENDING MONEY ABROAD, remittances, rbi, icici bank, covid-19, coronavirus, covid-19 update, Stock markets , covid drive market trends, foreign investment, Brent crude prices and rupee movement,Post launch of delayed payment monitoring portal MSME Samadhaan in October 2017, 26,981 complaints have been filed by MSMEs involving Rs 9,626 crore so far.

The Reserve Bank of India-regulated bill discounting mechanism TReDS for entrepreneurs to unlock working capital tied in their unpaid invoices has registered 1,592 companies with turnover of more than Rs 500 crore as of May 31, 2021, to facilitate credit to MSMEs, available data from the MSME Ministry showed. TReDS as a concept was introduced in 2014 by the central bank while later in 2017, three platforms including M1Xchange promoted by Mynd Solutions, Invoicemart (joint venture of Axis Bank and mjunction services), and RXIL (joint venture between SIDBI and NSE) were issued licenses to operate on TReDS mechanism. According to a statement by Finance Ministry, the number of companies registered had increased 4.8x from 329 as of January 31, 2021.

“A list of 4599 companies having turnover of more than Rs 500 Crore was identified by the Ministry of Corporate Affairs. After filtering out companies that are registered on TReDS and which are central govt. companies, so far 1592 companies have registered themselves on the TReDS portal,” the MSME Ministry said in the update shared on MSME Dashboard. Moreover, the Department of Public Enterprises – the nodal department for all central public sector enterprises (CPSEs) — has communicated to all CPSEs regarding the onboarding of CPSEs on TReDS platform while 170 CPSEs have already boarded TReDS.

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“After the Covid lockdown companies increased use of the TReDS platforms since digital replaced a large part of the economy and this enabled cos to reduce their cost and yet help MSME suppliers. In M1 for instance we had seen a throughput of more than Rs 5600 crore – this was 100 percent of total cumulative throughput in the previous three years. Even in April and May, this year transactions are higher with a cumulative volume of 1300 crore,” Sundeep Mohindru, Founder Director, Mynd Solutions told Financial Express Online.

The government had last year waived the charges for on-boarding the TReDS platforms till March 31, 2021, this year to help MSMEs list bills without any fee. MSMEs earlier had to pay the on-boarding charge of Rs 10,000 to the concerned exchange part of the TReDS mechanism. The MSME Ministry had also integrated the Udyam Registration portal with TReDS and GeM for ease of doing business for MSMEs.

Post launch of the delayed payment monitoring portal MSME Samadhaan in October 2017, 26,981 complaints have been filed by MSMEs involving Rs 9,626 crore so far. Of this, 7,040 cases involving Rs 1,287 crore were disposed. As per the MSMED Act, 2006, the buyer is liable to pay compound interest with the monthly interest to the supplier on the amount at three times the bank rate notified by RBI in case he/she fails to pay the supplier within 45 days of the acceptance of the goods or service.

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