In order to facilitate the financing of trade receivables for MSMEs, the scope of activities of the Trade Receivables Discounting System (TReDS) platform will be expanded, said the Reserve Bank of India (RBI). In this regard, TReDS will allow the participation of entities undertaking factoring business as financiers, enable secondary market operations, and provide insurance facility.
The new developments will mean that all entities eligible to undertake factoring business under the local regulations (Factoring Regulation Act) will be allowed to participate as financiers.