Page 27 - Banking Finance November 2022

ARTICLE

Participants Under TReDS: Exchange debits Buyer's bank account for Rs.1000 &
credits the financier's bank account.

Financier Banks & Process:

NBFC Factors

Exchange

Buyer Supplier

PSUs, Corporates & Enterprises as per
Govt. Depts. MSMED Act, 2006
Treds Exchanges:
Functioning of Treds: Reserve Bank of India authorized following three
Suppliers delivers the goods/services (outside TReDS). TReDS exchanges;
Supplier Logs in & upload the Invoice (Rs.1000). 1. RXIL: Receivables Exchange of India Ltd (RXIL) was
incorporated on February 25, 2016 as a joint venture
Validate invoice, convert to factoring unit & publish for
between Small Industries Development Bank of India
acceptance.
(SIDBI) - the apex financial institution for promotion and
Buyer Logs in & accepts the Invoice (Rs.1000)
financing of MSMEs in India and National Stock
Publish the factoring unit for bidding. Exchange of India Limited (NSE) - premier stock
exchange in India. RXIL operates the Trade Receivables
Financiers bid against the factor.
Discounting System (TReDS) Platform as per the TReDS
Accepts the Bids (% interest as best bid).
guideline issued by Reserve Bank of India (RBI) on
Exchange generates the settlement File to debit December 3, 2014.
Financier and pay Supplier.
2. M1Exchange: On November 24th, 2015, Reserve Bank
Exchange debits Financier's bank account for Rs.900 and of India (RBI) granted "in-principle" approval to three
credit the supplier's bank account. companies to set up Trade Receivable Discounting
System (TReDS) platform. Mynd Solutions Pvt Ltd, is one
amongst the three companies set up the TReDS
platform 'M1xchange' on April 7th, 2017 under the
Payment and Settlement System (PSS) Act 2007 to
facilitate discounting of invoices and Bills of exchange
for MSMEs on PAN India basis. M1xchange was
launched on 7th April 2017 to service the finance needs
of MSME across India.

3. Invoice Mart: Invoice mart is a Trade Receivables
Discounting System (TReDS) platform set up to resolve
the credit challenges faced by MSMEs. It is promoted

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