RBI eases MSME onboarding on TReDS, allows guarantee cover for financiers

Jun 23, 2026

Central bank consolidates TReDS regulations, eases MSME access and permits financiers to obtain credit guarantee cover on platform exposures

The Reserve Bank of India (RBI) on Tuesday simplified the onboarding process for micro, small and medium enterprises (MSMEs) on the Trade Receivables Discounting System (TReDS) platform and allowed financiers to avail themselves of credit guarantee cover for exposures undertaken through the platform.

In a Master Direction issued on Tuesday, the RBI said it had comprehensively reviewed existing instructions governing TReDS and decided to consolidate them into a single framework.

TReDS is an electronic platform that facilitates financing of trade receivables of MSME sellers through multiple financiers.

The RBI said MSMEs continue to face constraints in obtaining adequate finance, particularly in converting trade receivables into liquid funds.

Under the new framework, financiers will be allowed to obtain guarantees for factoring units from any credit guarantee fund trust set up by the government. The directions also permit insurance companies and government-notified credit guarantee funds to participate on TReDS platforms.

Further, the RBI said TReDS operators must implement "necessary validation mechanisms" to ensure that a seller qualifies as an MSME and that funds due to the seller are credited only to the seller's bank account.

The central bank also aligned the minimum net-worth requirement for TReDS operators with that applicable to other non-bank payment system operators at Rs 25 crore. Existing entities have until 31 March 2028 to meet the requirement.

The directions came into effect immediately.

[The Business Standard]