TReDS Made Mandatory for CPSE–MSME Invoice Settlement

The MSME Ministry mandated operating Central Public Sector Enterprises (CPSEs) to route MSME invoices through RBI-authorised TReDS platforms.

TReDS

Trade Receivables Discounting System

Purpose:

• MSMEs sell/discount their invoices.
• Financiers provide working capital.
• MSMEs receive funds before the buyer's payment due date.

Benefits

• Faster payments
• Better cash flow
• Collateral-free working capital
• Greater transparency.

Important Timeline

• TReDS operational since 2017
• CPSE/company onboarding expanded earlier.
• Turnover threshold reduced from:
  • ₹500 crore → ₹250 crore in 2024
• Mandatory TReDS settlement from 30 June 2026.

Five Platforms Mentioned

• RXIL
• M1xchange
• Invoicemart
• C2treds
• DTX

UPSC Economy

TReDS = MSME liquidity + invoice discounting + fintech + formalisation