New Delhi, Mar 1 (KNN) The Ministry of MSME is considering bringing in necessary rules for making it mandatory for PSUs, Government Departments and Corporates to register themselves in Trade Receivables Discounting System (TReDS) platform.

The Reserve Bank of India (RBI) said this in its Agenda for 21st Meeting of Standing Advisory Committee (SAC) to be held in Chennai on March 3, 2017.

During the 20th meeting of Standing Advisory Committee on MSMEs held on August 25, 2016 at RBI, Mumbai, the Ministry of MSME has furnished its view as, “It would not serve much purpose if PSUs are asked to register mandatorily on TReDS platform. This is so as MSME who supply to PSUs, supply to non-PSU organization / agencies as well. The problem of delayed payment is prevalent across categories of buyers, be they PSUs, private or other entities.”

Further, acceptability and effectiveness of TReDS as an effective platform is yet to be established. As far as corporates are concerned, the matter needs to be examined by Ministry of Corporate Affairs as to how they can be persuaded / directed to join TReDS, the Ministry had said.

In order to solve the problem of delayed payment to MSMEs, RBI had come out with the guidelines for setting up and operating the TReDS.

RBI had initiated  the scheme is for setting up and operating the institutional mechanism to facilitate the financing of trade receivables of MSMEs from corporate and other buyers, including government departments and PSUs through multiple financiers.

According to RBI the intention was to facilitate Electronic Bill Factoring Exchanges in the country, which could electronically accept and auction MSME bills so that MSMEs could convert their receivables without delay.

In-principle approval was given to 3 entities by DPSS for operationalisation of the TReDS and they are now the process of setting up of the TReDS.

One of the 3 entities, the Receivables Exchange of India Ltd (RXIL), which is a joint venture promoted by Small Industries Development Bank of India (SIDBI) and National Stock Exchange of India Limited (NSE), has operationalised the TReDS in January 2017. (KNN Bureau)