On 23 June 2026 the Reserve Bank of India issued the “Reserve Bank of India (Trade Receivables Discounting System) Directions, 2026” to rationalise the regulatory framework and simplify onboarding of MSME sellers on TReDS.
Key regulatory changes
- Net worth norm: Entities seeking TReDS authorisation must have a minimum net worth of ₹25 crore.
- Compliance deadline: Existing TReDS operators must meet the ₹25 crore requirement by 31 March 2028 and maintain it on an ongoing basis.
- Statutory auditor certificate: Applicants must submit a certificate from their statutory auditor verifying net worth.
- Due diligence: Mandatory due diligence on MSME sellers has been removed to ease onboarding.
Operational and market features
- TReDS function: Electronic platform for auction/discounting of trade receivables to banks, NBFCs and other financiers.
- Invoice authenticity & registration: Platforms must ensure invoice authenticity, enable transparent bidding and register assignments with CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India).
- Without recourse factoring: Factoring transactions under TReDS remain without recourse to MSME sellers; buyer takes unconditional payment obligation on invoice acceptance.
- Credit guarantee cover: Financiers may obtain credit guarantee cover for TReDS exposures from government‑backed credit guarantee fund trusts.
IASPOINT Booster Facts
- Directions: Reserve Bank of India (Trade Receivables Discounting System) Directions, 2026 issued 23 June 2026.
- Regulatory role: RBI is the licensing and supervisory authority for TReDS platforms.
- CERSAI linkage: Assignment registration in CERSAI creates public record for securitisation and priority of receivables.