Trade Receivables Discounting System (TReDS) is an electronic platform for facilitating the financing/discounting of trade receivables of which sector?​

Correct option is D

The correct answer is: (D) MSME sector

Explanation:

• The Trade Receivables Discounting System (TReDS) is an electronic platform introduced by the Reserve Bank of India (RBI) to facilitate the financing and discounting of trade receivables of Micro, Small, and Medium Enterprises (MSMEs).

• It allows MSMEs to get payments earlier by selling their receivables (bills/invoices) to financiers at a competitive rate through an online auction mechanism.

Information Booster:

• TReDS was launched in 2017, regulated under Payment and Settlement Systems Act, 2007.

• Platforms like RXIL, M1xchange, and Invoicemart operate under the TReDS framework.

• It helps MSMEs maintain cash flow and working capital without waiting for payment cycles.

• Only buyers (corporates, PSUs), sellers (MSMEs), and financiers (banks/NBFCs) can participate.

• RBI mandates that PSUs and large corporates onboard TReDS for MSME payment transparency.