Union bank of India inks pact with RXIL as TReDS partner
New Delhi, Dec 7 (KNN) The Union Bank of India recently signed agreement with Receivable Exchange of India Ltd (RXIL) partnering for discounting invoice of the Micro, Small and Medium Enterprises (MSMEs) on the digital portal.
RXIL is a joint venture between the SIDBI and NSE to operate a TReDS platform to work with the invoices of the MSMEs in compliance with the TReDS notifications under the Reserve Bank of India.
A formal agreement between the Union Bank and RXIL was signed recently brining the pact in action.
MSMEs being back bone of Indian Economy and despite the important role played by them in country’s overall economic growth continue to face constraints in obtaining adequate finance, particularly in terms of their ability to convert their trade receivables into liquid funds.
In an attempt to address the gaps, a Committee on Financial Sector Reforms (FSR), headed by the former Reserve Bank of India (RBI) Governor, Raghuram Rajan, in 2008, in its report “Hundred Small Steps” recommended setting up of Electronic Bill Factoring Exchanges, whereby MSME bills against large companies could be accepted electronically and auctioned, to ensure prompt realisation of trade receivables at competitive rates. (KNN/ DA)