Corporates TReDS Onboarding Deadline: How to Complete by March 31, 2025

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 Corporates TReDS Onboarding Deadline: How to Complete by March 31, 2025


The Indian government has mandated that all companies registered under the Companies Act, 2013, with a turnover exceeding INR 250 crores, and all Central Public Sector Enterprises (CPSEs) must onboard themselves onto the Trade Receivables Discounting System (TReDS) platforms by March 31, 2025. This deadline signifies a crucial step towards streamlining trade finance for MSMEs and fostering a more inclusive financial ecosystem.

This blog post will provide TReDS onboarding tips and checklist.

  1. Understanding TReDS platforms

TReDS platforms facilitate the discounting of invoices raised by MSMEs against larger corporates. These platforms enable MSMEs to receive faster payments for their goods and services, improving their cash flow.

Below are advantages of these platforms, which have been split among their main participants—buyers, sellers, and financiers.

Advantages to Sellers

  • Fast Cash Flow: Businesses may get cash right away by selling their outstanding invoices. They will be able to satisfy their short-term financial obligations and strengthen their liquidity position as a result.
  • Better Rates: When compared to conventional financing solutions, the competitive bidding process on TReDS platforms frequently yields lower discount rates.
  • No Collateral Needed: Companies are able to get cash without having to pledge any assets as security, which clearly lowers the possibility of asset confiscation.

Advantages for Buyers

  • Savings: Lower interest rates and financing expenses may result from lenders bidding competitively.
  • Better Connections: Business connections may be improved by paying suppliers on time.
  • Reduced Administrative Burden: By streamlining the invoice discounting procedure, this digital platform lowers administrative costs and paperwork. 

Advantages for Financiers:

  • Increased Market Access: Financiers have access to a wider pool of potential borrowers, especially MSMEs.
  • Decreased Costs: Automation and digitisation can lower the operational costs associated with loan distribution and processing.
  • Reduced Risk: Financing based on confirmed invoices lowers credit risk since the underlying invoice offers security.
  1. Steps to Complete TReDS Onboarding

Below are the steps to enroll on TReDS platform in the coming year:

  • Choose a TReDS Platform: Select an RBI-authorised TReDS platform (e.g., Receivables Exchange of India Ltd. (RXIL), M1xchange, Invoicemart).
  • Gather Necessary Documents: Document requirements for TReDS registration vary as per the applied portal, but some of the compulsory documents are as follows:
  • Application form
  • Master agreement
  • Bank confirmation letter
  • Mandate form for debiting the designated bank account (applicable for financiers and buyers)
  • KYC documents of the applicant entity, promoters, administrator (Admin User), authorised signatories, etc.
  • Complete the Onboarding Process: Follow the platform's online onboarding process, which typically involves filling out online forms, uploading documents, and completing KYC procedures.
  • Integrate with Internal Systems: Integrate the TReDS platform with the company's ERP or other relevant systems for seamless invoice uploading and data exchange.
  • Train Employees: Provide comprehensive training to employees on utilizing the TReDS platform, encompassing invoice uploading, tracking, and payment reconciliation procedures. 
  • Start Utilising the Platform: Begin uploading invoices and utilising the TReDS platform for invoice discounting.

Here are all the required tips and other information that can be useful for businesses who had to become a part of this onboarding process.

Three companies were given permission by the Reserve Bank of India (RBI) to set up Trade Receivable Discounting System (TReDS) platforms in 2015. The M1xchange platform was introduced by Mynd Solutions Pvt Ltd in 2017 in accordance with the Payment and Settlement System (PSS) Act. For MSMEs across the country, this portal makes it easier to discount bills of exchange and invoices.

By turning their outstanding bills into cash, this TReDS platform has enabled MSMEs to obtain instant liquidity ever since it was founded. This is accomplished through a special bidding procedure that includes a range of banks, including international, private, and nationalised ones. In addition to providing affordable loan rates, the procedure is effective.

Large corporations, such as PSUs and government departments, are buyers in TReDS; banks and NBFCs are financiers, and micro, small, and medium-sized enterprises, or "MSMEs," are suppliers. Through an open bid procedure including several lenders, M1xchange seeks to offer MSMEs cash flow financing tied to supply chains at reasonable rates. According to RBI standards, financing via M1xchange is "without recourse" to the MSME provider. To guarantee the legitimacy of the underlying transactions, M1xchange uses the newest technology.

Conclusion

The March 31, 2025, deadline for corporate onboarding onto TReDS platforms presents an opportunity for businesses to contribute to a more inclusive and efficient trade finance ecosystem. By taking proactive steps to complete the onboarding process, companies can ensure compliance, improve their relationships with MSMEs, and enhance their overall financial performance. That is why companies with a turnover of INR 250 crores and all Central Public Sector Enterprises (CPSEs) need to have a TReDS 2025 deadline awareness.

In 2017, Mynd Solutions Pvt Ltd launched M1xchange, a TReDS platform authorised by the RBI under the PSS Act. This platform facilitates the discounting of invoices for MSMEs, enabling them to quickly convert receivables into cash. M1xchange leverages a competitive bidding process involving various banks to offer MSMEs access to affordable financing. The platform focuses on "Without Recourse" financing for MSMEs, ensuring minimal risk. M1xchange utilises cutting-edge technology to ensure the authenticity of all transactions. Key players in the M1xchange ecosystem include MSMEs (suppliers), large corporates (buyers), and financial institutions (financiers).

 

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