Ministry of Micro Small and Medium Enterprises introduces Trade Receivables Discounting System to facilitate transactions between SMEs and Corporate Entities
The Ministry of Micro Small and Medium Enterprises (“Ministry”) through its notification dated 2nd November, 2018 makes it mandatory for all companies registered with the Ministry of Corporate Affairs (MCA) having turnover more than 500 Crores to get itself onboard with the Trade Receivables Discounting System, a platform created as per directives of Reserve Bank of India (RBI). The Competent Authority to monitor the compliances arising out of these instructions are the respective Registrars of Companies having jurisdiction over its area.
Trade Receivables Discounting System (TReDS):
It is an electronic platform with respect to trade receivables. It facilitates in discounting of invoices and bills of exchanges. The participants in this system are small and medium enterprises and corporate entities. The system facilitates in transactions between the small and medium enterprises and corporate entities.