Allows insurance companies and credit guarantee fund trusts to play a more active role in supporting transactions on the platform

The Reserve Bank of India (RBI) on Tuesday issued final guidelines on the Trade Receivables Discounting System (TReDS), simplifying the onboarding process for MSME sellers and enabling insurance companies and credit guarantee fund trusts to play a larger role in supporting transactions on the platform.

The move is aimed at improving ease of doing business for MSMEs and encouraging greater participation on TReDS.

TReDS is an institutional mechanism designed to facilitate financing of trade receivables of MSMEs from corporate buyers, government departments and public sector undertakings (PSUs). The platform brings together various participants for uploading, accepting, bidding, discounting and settling invoices and bills, thereby enhancing liquidity for MSMEs through timely access to working capital at competitive rates.

RBI said TReDS platforms shall undertake customer due diligence (CDD) of buyers and put in place appropriate mechanisms to establish the genuineness of uploaded invoices and bills.

Insurance cover

The central bank has also directed TReDS platforms to establish validation mechanisms to ensure that sellers are genuine MSMEs and that funds are credited only to the seller's bank account. The measure is expected to make access to invoice financing faster and more convenient for small businesses.

Under the revised framework, financiers may avail themselves of insurance cover for TReDS transactions, provided the insurance premium is not borne by the MSME seller. However, such credit insurance cannot be treated as a credit risk mitigant for availing prudential benefits.

Further, financiers may obtain guarantees for factoring units — trade receivables in the form of invoices or bills uploaded by sellers or buyers — from any credit guarantee fund trust set up by the Union government.

With regard to capital requirements, entities seeking authorisation to set up and operate a TReDS platform must maintain a minimum net worth of ₹25 crore. Existing TReDS operators have been given time until March 31, 2028, to meet this requirement.

There are currently five TReDS platforms — A.TReDS, Receivables Exchange of India, Mynd Solutions, C2FO Factoring Solutions and KredX Platform. According to RBI data, these platforms collectively financed 1,40,972 invoices worth ₹29,869 crore in April 2026.

Published on June 23, 2026