Guide to Corporate Onboarding on the TReDS Platform Last Date: March 31, 2025

Guide to Corporate Onboarding on the TReDS Platform Last Date: March 31, 2025

There is not much time left! According to government mandates for TReDS, businesses must ensure TReDS compliance before the March 31st deadline.

As per this, all companies registered under the Companies Act, 2013, with a turnover exceeding INR 2.5 billion and Central Public Sector Enterprises (CPSEs) have to onboard themselves onto the Trade Receivables Discounting System (TReDS) platforms.

This guide will help these entities in TReDS onboarding till its last date. For this purpose, it will put insight on various aspects of this platform.

What is TReDS platform?

TReDS platform operates as an electronic marketplace that connects MSMEs with a diverse pool of lenders, facilitating the discounting of trade receivables and providing a solution to the issue of delayed payments and constrained working capital.

TReDS’ Participants:

The TReDS platform participants are listed below:

·       Sellers: Micro, small, and medium-sized enterprises (MSMEs) send their invoices to buyers to get quick cash.

·       Buyers: Businesses, governmental bodies, and public sector organisations (PSUs) that approve the invoices submitted by MSMEs.

·       Financial Institutions: The Reserve Bank of India (RBI) has authorised banks, non-banking financial companies (NBFCs), and other financial institutions to provide loans based on the buyers' creditworthiness.

TReDS Benefits for Every Participant
The following is a breakdown of the platform's advantages for its main users, which include funders, buyers, and sellers.

Buyers

·       Reduced Costs: Competitive bidding among lenders can lead to lower interest rates and financing expenses for buyers.

·       Improved Supplier Relationships: Timely payments to suppliers foster stronger business relationships.

·       Streamlined Operations: The digital TReDS platform simplifies the invoice discounting process and able to reduce paperwork and administrative burden for buyers.

Sellers

·       Improved Cash Flow: As mentioned before, selling unpaid invoices quickly provides immediate access to funds, improving cash flow and liquidity for MSMEs.

·       Competitive Discount Rates: The competitive bidding process on TReDS platform typically results in lower discount rates compared to traditional financing options.

·       Reduced Collateral Risk: This platform often does not require collateral, minimising the risk of asset seizure for sellers.

Financiers

·       Expanded Customer Base: This kind of platform enables banks to connect with a wider range of customers, particularly MSMEs.

·       Reduced Operational Costs: Both automation and digitisation streamline loan processing and distribution, leading to lower operational costs.

·       Reduced Credit Risk: Financing backed by verified invoices can help mitigate credit risk for financial institutions, as the invoices act as a form of security.

Steps to onboard to TReDS

It's time to comprehend the procedures for onboarding to TReDS in 2025 after learning about the advantages. These steps will cover factors to consider before choosing any platform, TReDS registration requirements 2025, and what to do after selecting one:

1. Key Factors for Selecting a TReDS Platform

Before choosing a TReDS platform, carefully evaluate the following factors:

Regulatory Compliance:

Ensure the platform is RBI-approved. Currently, only three TReDS platforms operate in India with RBI approval.

Turnaround Time (TAT):

Prioritise platforms with fast TATs. Quick processing enables businesses to capitalise on market opportunities and minimise the impact of price fluctuations.

Security:

Choose a platform with robust security measures. This is because these measures can help in protecting business from cyber threats and potential financial losses.

Customer Support:

Evaluate the quality and responsiveness of customer support. Efficient customer support ensures quick resolution of issues and minimises potential disruptions to business operations.

Step 2: Completing TReDS Onboarding

Below are the TReDS registration requirements 2025:

Platform Selection:

Choose a TReDS platform based on the factors discussed in step 1 (regulatory compliance, cost transparency, turnaround time, security, and customer support).

Document Submission:

  • Prepare and submit the necessary documents to the selected TReDS platform.
  • Commonly required documents include:
    • Application form that is completed and master agreement
    • Bank confirmation letter
    • Mandate form for debiting the designated bank account (applicable for financiers and buyers)
    • KYC documents for the applicant entity, its promoters, administrators, and authorised signatories.
  • Specific document requirements may vary depending on the chosen platform.

Step 3: Final Process

After steps 1 and 2, clients have to:

Complete the Registration Process:

Follow the platform's onboarding procedures, which may include:

·       Completing online forms

·       Uploading required documents

·       Undergoing KYC verification

Integrate with Internal Systems:

Enhance efficiency by integrating the TReDS platform with the company's existing internal systems. This streamlines invoice uploads and data synchronisation for smoother operations.

This comprehensive guide provides all the critical information and guidelines that businesses require to successfully complete the TReDS onboarding process by 2025.

M1xchange: A Leading TReDS Platform in India

The Reserve Bank of India (RBI) authorised the establishment of the Trade Receivables Discounting System (TReDS) in 2015. In response, Mynd Solutions Pvt. Ltd. launched M1xchange, a TReDS platform, in 2017, adhering to the Payment and Settlement System (PSS) Act. Its participants are micro, small, and medium enterprises (MSMEs) (suppliers); large corporates, including PSUs and government departments (buyers); and banks/NBFCs (financiers).

It enables MSMEs to convert their trade receivables into liquid funds on a non-recourse basis, facilitating access to finance.

M1xchange has garnered significant investor support, with notable investors including Amazon, Mayfield, BEENXT, IndiaMART, and SIDBI Venture Capital Limited.

Conclusion

This guide tells corporates about the March 31 TReDS registration deadline and also various aspects related to the Trade Receivables Discounting System (TReDS) platform.

In 2015, the RBI authorised TReDS platforms. Mynd Solutions launched M1xchange in 2017, an RBI-regulated platform connecting MSMEs (suppliers) with large corporates (buyers) and financiers (banks/NBFCs). M1xchange enables MSMEs to convert receivables into cash on a non-recourse basis, facilitating access to finance. Backed by investors like Amazon and Mayfield, M1xchange provides a transparent platform for invoice discounting.

 

 


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