{"id":457,"date":"2018-12-20T06:27:07","date_gmt":"2018-12-20T06:27:07","guid":{"rendered":"https:\/\/m1xchange.com\/thought-xchange\/?p=457"},"modified":"2023-11-06T06:20:36","modified_gmt":"2023-11-06T06:20:36","slug":"government-backed-treds-to-change-how-msmes-operate","status":"publish","type":"post","link":"https:\/\/www.m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/","title":{"rendered":"Government-backed TReDS to Change How MSMEs Operate"},"content":{"rendered":"

Nearly three years ago, on September 27, 2015, Prime Minister Modi, while addressing the who\u2019s who of the tech world at the Digital India event in Silicon Valley said \u201c \u2026 in this digital age, we have an opportunity to transform lives of people in ways that was hard to imagine just a couple of decades ago.\u201d A month later on November 24th, 2015, Reserve Bank of India (RBI) granted an \u201cin-principle\u201d approval to three companies, Mynd Solutions being amongst them, to set up and operate a new Trade Receivables Discounting System (TReDS<\/strong><\/a>) to be formed under the Payment and Settlement System (PSS) Act 2007. This was the culmination of a concept paper on \u201cMicro, Small & Medium Enterprises (MSME) Factoring-Trade Receivables Exchange\u201d  published the Reserve Bank of India by in March 2014. In the next few years this platform was destined to change the way MSMEs managed their working capital.<\/p>\n

Government\u2019s seriousness and commitment to TReDS is evident by the statements made in parliament by the Union Finance minister Mr Arun Jaitely while presenting two budgets. In February-2015   the Finance Minister mentioned during his election speech that a significant part of the working capital requirement of an MSME arose due to long receivables realization cycles and the government was in the process of establishing an electronic Trade Receivables Discounting System (TReDS) financing of trade receivables of MSMEs, from corporate<\/strong> <\/a>and other buyers, through multiple financiers. This should improve the liquidity in the MSME sector significantly. With the advent of GST, the government integrated it with TReDS, and again in his budget speech, the honorable minister said that \u201c\u2026public sector banks and corporates will be onboarded to TReDS and linked to GST, which is expected to result in mass formalization of the MSME sector and give banks access to cash flow information\u201d. This was aimed at giving a larger degree of transparency and safety to the TReDS platform.<\/p>\n

The government wants to use TReDS as a tool for economic development and is all geared up to broad-base the platform so that MSMEs gain maximum benefit.<\/strong> It is with this in mind the government in a gazette notification dated 2nd November, 2018; stated that \u201c\u2026all companies registered with the Companies Act, 2013 (18 of 2013) with a turnover of more than Rs. 500 crore (rupees five hundred crores) and all Central Public Sector Enterprises shall be required to get themselves onboarded on the Trade Receivables Discounting System platform, set up as per the notification of the Reserve Bank of India\u201d.<\/p>\n

The acceptance of TReDS by the banking community, Corporate Houses, and the backing that this platform has from the Government of India is a clear indicator that TReDS will be the financial game-changer for the estimated 39 million MSMEs in India.<\/p>\n","protected":false},"excerpt":{"rendered":"

Nearly three years ago, on September 27, 2015, Prime Minister Modi, while addressing the who\u2019s who \u2026<\/div>","protected":false},"author":1,"featured_media":458,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[69,42,41],"tags":[],"yoast_head":"\nGovernment-backed TReDS to Change How MSMEs Operate - M1xchange<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Government-backed TReDS to Change How MSMEs Operate - M1xchange\" \/>\n<meta property=\"og:description\" content=\"Nearly three years ago, on September 27, 2015, Prime Minister Modi, while addressing the who\u2019s who of the tech world at the Digital India event in Silicon Valley said \u201c \u2026 in this digital age, we have an opportunity to transform lives of people in ways that was hard to imagine just a couple of …\" \/>\n<meta property=\"og:url\" content=\"https:\/\/m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/\" \/>\n<meta property=\"og:site_name\" content=\"M1xchange\" \/>\n<meta property=\"article:published_time\" content=\"2018-12-20T06:27:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-06T06:20:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.m1xchange.com\/thought-xchange\/wp-content\/uploads\/2018\/12\/Iron-and-Steel.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1400\" \/>\n\t<meta property=\"og:image:height\" content=\"933\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.m1xchange.com\/thought-xchange\/#\/schema\/person\/599717bc2dfda3b64f8d619ee4c32cbb\"},\"headline\":\"Government-backed TReDS to Change How MSMEs Operate\",\"datePublished\":\"2018-12-20T06:27:07+00:00\",\"dateModified\":\"2023-11-06T06:20:36+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/\"},\"wordCount\":460,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.m1xchange.com\/thought-xchange\/#organization\"},\"image\":{\"@id\":\"https:\/\/m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.m1xchange.com\/thought-xchange\/wp-content\/uploads\/2018\/12\/Iron-and-Steel.jpg\",\"articleSection\":[\"Blogs\",\"Opinion\",\"TReDS\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/\",\"url\":\"https:\/\/m1xchange.com\/thought-xchange\/government-backed-treds-to-change-how-msmes-operate\/\",\"name\":\"Government-backed TReDS to Change How MSMEs Operate - 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