The central bank’s move to allow insurance companies to participate in the ₹60,000 crore TReDS platform is likely to increase the participation of non-banks and mid-sized corporates. Secondary market deals will also free up additional liquidity for existing participants. Currently, there are nearly 45,000 medium and small enterprises that are registered sellers on the platform.
Trade Receivables and Discounting System (TReDS) is an electronic bill discounting platform regulated by RBI and endorsed by the central government to provide MSME ‘suppliers’ of corporate ‘buyers’ instant payments for future receivables to prevent delay in payouts for cash-strapped small businesses.
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