On Tuesday, 5 October 2021, BSE Tech received in-principal approval from RBI to set up its Trades Receivable Discounting System or TReDs. This authorisation was initiated under the purview of Payments and Settlement Systems Act, 2007.
BSE Technologies Limited, one of BSE’s wholly-owned arms, is looking to introduce this platform to help MSMEs in working capital management.
More Regarding TReDs!
TReDs, introduced in India in December 2014, provides Micro, Small and Medium Enterprises in India access to an electronic platform to discount/finance their trade receivables.
With this platform, MSMEs can facilitate their trade receivables from corporates or other types of buyers. The incorporation of this online platform will help to bring various types of participants together. Consequently, MSMEs and concerned parties will be able to upload, accept, discount, trade, and settle invoices with ease.
What to Expect from this Development?
BSE Tech, following the footsteps of its parent company, is looking to build a well fleshed-out financial ecosystem around India’s MSME sector. With this integration of TReDs into BSE Tech’s operations, the company hopes to streamline its process of raising working capital for concerned businesses.
This news comes as a boon for small business owners across the country. With the sector already struggling from the aftermath of this pandemic, financial aid is the need of the hour. As per a report published in May 2021, about 59% of startups and MSMEs across the country were on the verge of shutting or scaling down due to the impact of Covid-19.
About BSE Tech
BSE Technologies Ltd is a subsidiary of the Bombay Stock Exchange. It is one of the leading players in digitising the businesses in the country’s financial services sector. It also provides IT solutions in various fields such as financial, banking and commodities markets.
Its parent company, BSE, is one of the oldest stock exchanges in the country and has been pivotal in shaping India’s capital market. The Bombay Stock Exchange boasts of a wide shareholder base, among which Deutsche Bourse, a noted global exchange is a strategic partner.
With such illustrious names associated with BSE Tech, small business owners across the country can look forward to the introduction of the TReDs platform to boost their venture’s growth.
For more information regarding this development, keep an eye on the Angel One Blogs.
Frequently Asked Questions
- When will BSE Tech launch its TReDs platform?
BSE Tech has merely received in-principal approval from the RBI. There are several formalities that it will need to fulfil before launching the TReDs platform.
- What are some of the existing companies offering the TReDs platform?
There are three TReDs platforms in India – Invoicemart, M1Xchange and RXIL.
- How many entities are registered under TReDs?
As of a report published in 2020, there were around 1300 buyers and 10,000 MSMEs registered under TReDs.