MANU/RPRL/0213/2015

Ministry : Reserve Bank of India

Department/Board : RBI

Press Release No. : 2015-2016/1235

Date : 24.11.2015

RBI grants "in-principle" approval to three applicants for setting up Trade Receivables Discounting System

In the Union Budget for 2015-16 the Honourable Union Finance Minister had highlighted the need for and use of TReDS for improving flow of funds to MSME sector by reducing the receivables realisation cycles. TReDS will allow SMEs to post their receivables on the system and get them financed. This will not only give them greater access to finance but will also put greater discipline on corporates to pay their dues on time.

In line with this, the Reserve Bank of India has today decided to grant "in-principle" approval to the following three applicants to set up and operate Trade Receivables Discounting System (TReDS) as per the Guidelines issued on December 03, 2014 under the Payment and Settlement System (PSS) Act 2007.

1. NSE Strategic Investment Corporation Limited (NSICL) and Small Industries Development Bank of India (SIDBI), Mumbai

2. Axis Bank Limited, Mumbai

3. Mynd Solutions Pvt. Ltd., Gurgaon, Haryana

The "in-principle" approval granted will be valid for a period of 6 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank. On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of "in-principle" approval, the Reserve Bank would consider granting to them a Certificate of Authorisation for commencement of the business of TReDS.

Selection Process

As the TReDS will be a payment system authorised under the PSS Act 2007, an elaborate four-tiered structure of application processing was adopted for this purpose.

To start with, a preliminary scrutiny of the applications was done by the Department of Payment and Set........