TReDS is a digital platform to support micro, small and medium enterprises (MSMEs) to get their bills financed at a competitive rate through an auction where multiple registered financiers/factors can participate. The Working mechanism of TReDS (i.e. how a bill is financed on TReDS) can be understood from the below chart:
The Reserve Bank of India (‘RBI’) vide Notification No. DOR.FIN.081/CGM(JPS) – 2022, Dated: 14.01.2022, has published the Registration of Assignment of Receivables (Reserve Bank) Regulations, 2022, which deals with manner of filing of particulars of transactions with the Central Registry by a Trade Receivable Discounting System (TReDS) on behalf of Factors. Where any trade receivables are financed through a Trade Receivables Discounting System (TReDS); the concerned TReDS on behalf of the Factor shall file, with the Central Registry, the particulars of:
Both of these forms shall be authenticated by the authorized person using a valid electronic signature. If the above particulars are not filed within the period of 10 days, TReDS shall make an application with the Central Registrar in this behalf stating the reasons for the delay and Central Registrar may, on being satisfied on same, allow the said particulars to be filed within such additional time not exceeding ten days as he may specify, upon payment of the fee as prescribed by GoI in Registration of Assignment of Receivables Rules, 2012, as amended from time to time.
Every Form for registration of any transaction relating to assignment of receivables or satisfaction of receivables on realisation shall be accompanied by the fee, as prescribed by GoI in Registration of Assignment of Receivables Rules, 2012, as amended from time to time, to be paid to the Central Registrar in the manner as may be specified by the Central Registrar from time to time.
