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Financier The customer query would be responded within 2 working days from receipt of query/complaint from stakeholders. All queries received after 4 PM on each working day would be reverted in maximum 2 working days from subsequent day.
According to the RBI TReDS guidelines, both Buyer and the supplier must be registered on M1xchange. As the counterparty is needed to accept the invoice. In case the buyer is not registered on M1xchange the supplier may request buyer to register or can contact M1xchange personnel to get in touch with Buyer and get it registered. The same can be followed if supplier is not registered. M1xchange has separate dedicated vendor and corporate onboarding teams to guide and assist in onboarding.
| Participants | Eligibility |
|---|---|
| Sellers | MSME entities as per the definition of the Micro, Small and Medium Enterprises Development Act, 2020 (“MSMED Act”) |
| Buyers | Corporates including companies and other buyers including Government Departments and Public Sector Undertakings and such other entities as may be permitted by the Reserve Bank of India (RBI) |
| Financiers | Banks, NBFC Factors, Financial Institutions and such other institutions as may be permitted by RBI from time to time |
| Classification | Micro | Small | Medium |
|---|---|---|---|
| Manufacturing Enterprises and Enterprises rendering Services | Invesment in Plant and Machinery or Equipment: Not more than Rs.1 crore and Annual Turnover: not more than Rs.5 crore. | Invesment in Plant and Machinery or Equipment: Not more than Rs.10 crore and Annual Turnover: not more than Rs.50 crore | Invesment in Plant and Machinery or Equipment: Not more than Rs.50 crore and Annual Turnover: not more than Rs.250 crore |
Factoring Unit Reference ID is a unique reference ID against the invoice or set of invoices uploaded on the platform by the supplier or the buyer reflecting the underline trade receivable of MSME seller.
Factoring Unit Reference ID becomes factoring unit on acceptance of the factoring unit reference ID (comprising of invoice details and scanned invoice) by the counterparty. Only accepted instruments enter into a bidding. Hence the factoring units visible to financers for bidding are all approved by the buyer for factoring.
| Factoring | When supplier initiates the process of financing of trade receivables and generally bears the interest financing cost. |
| Reverse Factoring | The Buyer initiates the process of financing of trade receivables of Sellers. The interest/financing cost may be borne by Buyer or Seller. |
M1xchange (M-ONE) stands for Mynd Online National Exchange for Trade Receivables. M1’s Trade Receivables Discounting System “TReDS” is an online exchange being set up under the approval of Reserve Bank of India (RBI) to facilitate discounting of invoices on a PAN India basis. Key participants in TReDS are Micro, Small & Medium Enterprises “MSME” (“the Suppliers”), large Corporate including PSUs and Govt. Departments (“the Buyers”) and Banks/NBFCs (“the Financiers”). M1xchange aims to provide MSMEs Supply chain related cash flow finance at competitive rates through an open bid process via multiple financiers. Financing on M1xchange is “Without Recourse” to MSME supplier as per RBI guidelines. M1xchange employs the latest technologies to ensure the authenticity of the underlying transactions.
Yes, as per the RBI Notification Dated July 13, 2017for the purpose of classification as Micro, Small and Medium Enterprises – documents to be relied upon:
From M1xchange we follow-up with the corporate; However, NO guarantee can provided for timely acceptance of the bill
No, it is not mandatory as of now.
Yes as per current regulation, most MSME vendors are paid within 45 days. TReDS enables the MSME vendor to reduce this 45 day period to as low as 1 day. So essentially what money was being received by MSME on the 45thday will now be received much earlier say on Day ‘1’ and at a very competitive interest rate.
Mr. Sundeep Mohindru, Reach him at sundeep.mohindru@m1xchange.com or 0124-4646000
Mr. Vivek Singh Bhakuni, reach him at vivek.bhakuni@m1xchange.com or 9871725666
TReDS is a digital marketplace set up by RBI in order to facilitate the discounting of invoices for MSMEs from corporate buyers through multiple financiers. There are several platforms for bill discounting platforms. M1xchange is one of the leading invoice discounting platforms in India.
Yes, it is eligible for tax benefits as it does not deduct tax at source.
In bill purchasing the whole amount is credited to the individual’s account by the finance institute after the purchase, the seller receives the whole amount of the bill as opposed to invoice/bill discounting, and the bank gets the commission.
Factoring & Reverse Factoring and two methods a bill is discounted on the TReDS platform. Both methods are designed to speed up and increase cash flow without disturbing the balance sheet.
Bill Discounting isn't technically a loan. It's a financing option where you sell outstanding invoices to a financial institution at a discounted rate to receive immediate funds. You don't repay the amount, but instead, repay the invoice value when your customer settles it.
Enroll on M1xchange by registering on M1xchange website. Submit details required forms. M1xchange executive will get in touch with you to help you register to the M1xchange process.
After providing the requisite documents M1xchange will take the request forward and intimate the participant once it is successfully registered.
After the completion of all required documents, registration process takes generally 3 days.
Basis your application & required documents availability in totality, within two-three days the registration shall be done. Enroll on M1xchange by registering online on M1xchange website, by clicking on “Register Online” link. Submit your contact details and other required information in the online registration form. M1xchange executive will get in touch with you to complete your registration to the M1xchange. After providing the requisite documents, M1xchange will take the request forward and intimate the participant once it is successfully registered.
A simple video clipping . Mr. Batra
YES, if any columns are not relevant to the client, it should be marked N/A (Not applicable).
YES, however if the client exempted from GST under “Central Goods and Services Tax Act, 2017” in that case we require declaration from the entity’s letterhead.
No, since RBI KYC directions does not consider the same as address proof. Alternate address proof is required for verifying the address like Electricity bill, water bill, telephone bill etc.
Lease deed; leave license agreement, utility bill and/or bank account statement of firm (not older than 2 months).
As per RBI’s KYC directions, any partner/trustee holding 15% or more of the shares of the firm is consider as beneficial owner
As per RBI’s KYC directions, any director/shareholder holding 25% or more of the shares of the company is consider as beneficial owner.
Yes, as all the LLP firms are register on ROC so we need to collect the COI for the LLP firms.
As per RBI’s KYC directions, any the Companies Act,2013, any “Officially Valid Document” (OVD) i.e., passport, the driving license, the Voter's Identity Card issued by the Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, letter issued by the National Population Register containing details of name and address are considered as valid address proof for individuals.
The standard changes are 5900(5000+18%), rest depending upon your buyer.
Vendor need a registered buyer list or any link where they can see the registered buyer.
Yes, Email Alerts / Notifications are also sent to the vendor post-registration.
Tax invoices related to the goods or services provided by MSME supplier to the buyer will be eligible for financing on M1xchange.
Whosoever (Buyer-RI , Seller – FF & RF , ) is having right to accept the bid, can see the bids offered by the Financiers.
Buyer and Seller can upload and approve the invoices at any moment. They can also accept the bid anytime they want. Financiers can quote/withdraw/rebid against any factoring unit until 9PM …as it is the T+1 cutoff time …
The factoring of the factoring unit shall depend on time consumed in receipt of bid from the Financiers during auction period and it’s acceptance by the seller/buyer. On bid acceptance, the payment shall be settled on T+1 or T+2 basis based on the cut-off time of acceptance of bid.
If no bids are received from Financiers or the invoice remains unfinanced then the commitment between the Buyer and supplier continues. In such case, the Buyer needs to make the payment to the Seller. The Buyer has the option to make the payment to the supplier outside the system…In such cases the bills uploaded on the platform are discarded to avoid double payment …
No. The financing of factoring units is not guaranteed on the TReDS platform. It is dependent on offering of bids by the Financiers, acceptance of bids by the cost bearer and settlement of obligation by the participants.
Yes. A Factoring Unit may be withdrawn from TReDS portal till the time a bid is not accepted by the cost bearer. It cannot be withdrawn after the bid is accepted by the cost bearer.
Amount which is not financed by the financier, and kept as a margin is known as margin money. This money is credited to supplier on due date.
Yes, but you cannot raise/present the same invoice to another Financier which is already discounting on TReDS platform.
The overall Grievance Redressal mechanism of TReDS would be multilevel and would ensure timely and correct resolution of each complaint/query/grievance.
| Escalation Level | Composition |
|---|---|
| 5th Level | Arbitration |
| 4th Level | COO |
| 3rd Level | M1xchange Compliance Manager / Head* |
| 2nd Level | M1xchange Anchor BD Manager |
| 1st Level | Customer support desk |
| Self Help | MIS for Buyer / supplier and Financier |
*compliance manager/nodal officer can be reached at ankita.sharma@m1xchange.com and/or 0124 4349330 ext-374
*Redressal Officer can be reached at abhay.singh@m1xchange.com and/or 1800-103-7261
Once the bid is accepted by the supplier or buyer whoever is the cost bearer, the designated bank account of the Financier will be auto-debited based on the mandated provided by them on T+1 (Bid acceptance date = 1 working day) and It will be auto-credited to the designated account of the supplier on T+1.
Similarly, on the final due date, the designated bank account of the Buyer will be auto-debited and the payment will be made to the Financier in its designated bank account on due date.
This entire mechanism is governed by National Payments Corporation Of India(NPCI). NPCI is working under RBI.
At the time of funding buyer mentions the due date of the invoices as which describes the tenure.
If the due date falls on a holiday, the obligations need to be settled on the preceding working day.
If the payment from Financier to supplier fails, the factoring unit(Bunch of Invoices with the same due date) will be marked as failed on the platform of M1xchange. In such context, we have two option to resolve this issue,
We can discard the invoice and reinitiate for bidding.
If financer and buyer agrees, we can resettle the factoring unit for the next working day with revised tenure and interest.
Non-payment by the Buyer on the due date to the Financier is equivalent to a default by the Buyer. The Buyer is required to settle directly with the Financier if the transaction is marked as past due on the TReDS portal.
In such context, we have two option to resolve this issue,
Buyer can directly request to the Financier for extension of due date on our portal and if Financier agrees, due date will be automatically updated to the next agreed date.
Buyer is required to settle directly to financer outside the TReDS on due date or after the due date with penal interest.
There shall be no legal action against vendor since invoice has been assigned to the financier(Invoice Ownership transferred from the Financier to the Seller after funding) and there will be no legal liability against vendors.
Factoring Product is non-recourse on TReDS.
Yes, a vendor has to mention latest turn over to establish the Internal Control values and size of Seller. To establish whether the vendor has a working capital accounted not, the certificate must state the same.
These documents are required as part of master KYC guidelines issued by RBI.
Power of attorney (POA) is a mandatory document prescribed by RBI, to be taken for opening account of partnership firm. Family members forming a partnership firm execute partnership deed between them stating various terms governing the relationship between the partners. Once the partnership firm is created, the status of family members changes to that of partners. For authorizing any partner to act on behalf of the firm, all the partners authorize such partner through POA. As such, the POA is required within the family members on the same rationale as Partnership Deed is required between family members forming partnership firm.
This is one time investment, shall benefit in future with increased turnover/invoice value. Moreover, if you are supplying to multiple buyers you would stand to benefit more.
Digital Certificates can be obtained from any licensed Certifying authority or its distributors.
The cost of obtaining a digital signature certificate can be obtained by calling M1xchange Helpdesk on the helpdesk number or by directly contacting the authorized distributor as listed above.
The pre-requisites to use digital signatures on M1xchange are as follows:
For Class 2 Digital Signature Certificate following documents are required to be submitted to our authorized distributor
Application Form
a) Aadhar Card
b) Passport
c) Driving License
d) PAN Card
e) Post Office ID Card
f) Bank Account Passbook/Statement containing the photograph and signed by an individual with attestation by the concerned bank official
g) Photo ID Card issued by the Ministry of Home Affairs of Centre/State Governments
h) Any Government issued Photo ID Card bearing the signatures of the individual Proof of Address (Any One)
a) Aadhar Card
b) Telephone Bill
c) Electricity Bill
d) Water Bill
e) Gas Connection
f) Bank statements signed by the bank
g) Service Tax/VAT Tax/Sales Tax registration certificate
h) Driving License (DL) / Registration Certificate (RC)
i) Voter ID Card
j) Passport
k) Property Tax/Corporation/Municipal corporates Receipt
M1xchange platform uses digital signature feature as an enhanced security feature to protect the interest of our participants.