{"id":5514,"date":"2022-06-13T08:16:02","date_gmt":"2022-06-13T08:16:02","guid":{"rendered":"https:\/\/www.indifi.com\/blog\/?p=5514"},"modified":"2025-08-19T09:51:14","modified_gmt":"2025-08-19T09:51:14","slug":"what-is-treds-features","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/","title":{"rendered":"What is TReDs Portal, How it Works &#038; Features"},"content":{"rendered":"<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/06\/TReDS.png\" alt=\"\" class=\"wp-image-5515\" width=\"418\" height=\"316\"\/><\/figure><\/div>\n\n\n<p>TReDS (<strong>Trade Receivables Discounting System<\/strong>) is a RBI-backed digital platform launched in 2018 to help MSMEs convert pending invoices into liquidity instantly. It streamlines working capital across platforms like RXIL, M1Xchange, and Invoicemart. In this comprehensive guide, discover TReDS&#8217; key features, how it works, and how MSMEs can benefit in 2024\u201325.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_67_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#What_is_TReDS_Portal\" title=\"What is TReDS Portal?\">What is TReDS Portal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#TReDs_Portal_%E2%80%93_How_Did_It_Come_Into_Play\" title=\"TReDs Portal &#8211; How Did It Come Into Play?\">TReDs Portal &#8211; How Did It Come Into Play?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#Key_Features_Of_TReDs\" title=\"Key Features Of TReDs\">Key Features Of TReDs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#Advantages_Of_TReDs_Portal\" title=\"Advantages Of TReDs Portal:&nbsp;\">Advantages Of TReDs Portal:&nbsp;<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#For_Sellers\" title=\"For Sellers\">For Sellers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#For_Buyers\" title=\"For Buyers\">For Buyers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#For_companies\" title=\"For companies\">For companies<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#How_TReDS_Platform_Works\" title=\"How TReDS Platform Works?\">How TReDS Platform Works?<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#1_Budget_Requirements\" title=\"1. Budget Requirements\">1. Budget Requirements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#2_Due_Diligence_of_Promoters\" title=\"2. Due Diligence of Promoters\">2. Due Diligence of Promoters<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#3_Technology_Capabilities\" title=\"3. Technology Capabilities\">3. Technology Capabilities<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#How_Does_TReDs_Assist_MSMEs\" title=\"How Does TReDs Assist MSMEs?\">How Does TReDs Assist MSMEs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#What_Do_We_Mean_By_Invoice_Discounting\" title=\"What Do We Mean By Invoice Discounting?\">What Do We Mean By Invoice Discounting?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#Next_Steps\" title=\"Next Steps\">Next Steps<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.indifi.com\/blog\/what-is-treds-features\/#FAQs\" title=\"FAQs\">FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_TReDS_Portal\"><\/span><strong>What is TReDS Portal?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>TReDS is an online platform that allows these MSME suppliers to discount their invoices and bills and enables them to receive payments without much hassle.&nbsp;<\/p>\n\n\n\n<p>For Small and Medium Enterprises, this platform also reduces annual interest payout. The primary motive of TReDS is to encourage MSME sellers to discount their bills and invoices raised against vendors and manage their working capital demands more effectively.&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.indifi.com\/msme-loans\"><img decoding=\"async\" loading=\"lazy\" width=\"500\" height=\"91\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-1-500x91.jpg\" alt=\"\" class=\"wp-image-5348\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-1-500x91.jpg 500w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-1.jpg 716w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"TReDs_Portal_%E2%80%93_How_Did_It_Come_Into_Play\"><\/span><strong>TReDs Portal &#8211; How Did It Come Into Play?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In 2014, the central bank first presented this TReDS. Post that, in 2017, the government granted permission and licences to three platforms that can operate on this TReDS mechanism.&nbsp;<\/p>\n\n\n\n<p>The three platforms are:<\/p>\n\n\n\n<p>1. RXIL (a joint venture of NSE and SIDBI)&nbsp;<\/p>\n\n\n\n<p>2. Mynd Solution\u2019s M1Xchange<\/p>\n\n\n\n<p>3. Invoicemart (a joint venture of Axis Bank and mjunction services)<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Features_Of_TReDs\"><\/span><strong>Key Features Of TReDs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>This platform has multiple features that come in handy for MSMEs to help them navigate smoothly, seamlessly, and without much hassle. Some key features are listed below:<\/p>\n\n\n\n<ol>\n<li>Automated and digital system<\/li>\n\n\n\n<li>Complete all your transactions online&nbsp;<\/li>\n\n\n\n<li>Quick access to needed funds without needing paperwork<\/li>\n\n\n\n<li>Streamlined procedures and standardised policies for smooth flow<\/li>\n\n\n\n<li>Competitive and attractive discount rates<\/li>\n\n\n\n<li><a href=\"https:\/\/www.indifi.com\/collateral-free-business-loans-india\">Zero Collateral<\/a> &#8211; get access to working capital without any collateral.&nbsp;<\/li>\n\n\n\n<li>Get access to <a href=\"https:\/\/www.indifi.com\/working-capital-loans-india\">working capital<\/a> in less than 72 hours.&nbsp;<\/li>\n\n\n\n<li>This helps shorten your cash cycles, as you can get quick access to working capital by invoice discounting your unpaid invoices.&nbsp;<\/li>\n\n\n\n<li>This is all done off-balance sheet. So when you avail of collateral-free invoice discounting service, it shows no negative impact on your books.<\/li>\n\n\n\n<li>All of these features help you avail working capital seamlessly, which helps in MSMEs business expansion and growth.&nbsp;&nbsp;<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_Of_TReDs_Portal\"><\/span><strong>Advantages Of TReDs Portal:&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_Sellers\"><\/span>For Sellers<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ol>\n<li>As it is completely digital, it takes extremely little paperwork and capital.<\/li>\n\n\n\n<li>In a very reasonable time, the vendors usually acquire the receipt of funds.<\/li>\n<\/ol>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_Buyers\"><\/span>For Buyers<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ol>\n<li>Enrolling on the TReDS platform, buyers can systematically track their cash flows<\/li>\n\n\n\n<li>This also ensures that their payment cycles are smooth, error-free, and seamless<\/li>\n\n\n\n<li>Creates transparency, trust, and convenience as the entire process is automated and digital.&nbsp;<\/li>\n<\/ol>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_companies\"><\/span>For companies<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ol>\n<li>Finance providers get access to a much broader market.<\/li>\n\n\n\n<li>As the system is automated and process-driven, it ensures the qualification of instruments.<\/li>\n\n\n\n<li>It helps reduce high operational costs.&nbsp;<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_TReDS_Platform_Works\"><\/span>How TReDS Platform Works?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any entity interested in operating and developing the TReDS must meet certain requirements to do so. We\u2019ve listed down the criteria here for easy reference:&nbsp;<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Budget_Requirements\"><\/span>1. Budget Requirements<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ol>\n<li>Since the TReDS is not authorized to take up credit risk, the minimum paid-up equity (capital) requirement is INR 25 crores. <\/li>\n\n\n\n<li>Other than the promoters, any entity will not be allowed to own more than 10% of the equity capital of the TReDS<\/li>\n\n\n\n<li>In the case of foreign ownership, the TReDS will come under the current foreign investment policy and be governed by it.&nbsp;<\/li>\n<\/ol>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Due_Diligence_of_Promoters\"><\/span>2. Due Diligence of Promoters<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>SEBI and RBI defined certain criteria and will judge the promoters and their organizations accordingly.&nbsp;<\/p>\n\n\n\n<ol>\n<li>Under the Issue of Capital and Disclosure requirements regulation by the SEBI in 2009, for any organization (or their promoters) to serve as TReDS, they must be \u2018fit and suitable.\u2019<\/li>\n\n\n\n<li>RBI will evaluate the applicants&#8217; status based on their previous records (sound financial credentials and record integrity) for at least 5 years.&nbsp;<\/li>\n\n\n\n<li>Other enforcement\/regulatory departments like the CBI, the <a href=\"https:\/\/www.indifi.com\/blog\/check-income-tax-2022-23-refund-status\/#:~:text=Byindifi,proportional%20to%20that%20person's%20earnings.\">Income Tax Department<\/a>, the Enforcement Directorate, and the SEBI might also request feedback on the applied candidates, if and when necessary.&nbsp;<\/li>\n<\/ol>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Technology_Capabilities\"><\/span>3. Technology Capabilities<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>The TReDS must have strong tech capabilities to ensure smooth operations. It should meet the following tech requirements.<\/p>\n\n\n\n<ol>\n<li>It must be able to provide a digital platform to all its participants.<\/li>\n\n\n\n<li>It should have a <a href=\"https:\/\/www.indifi.com\/business-loan\/know-your-pan\">proper business plan<\/a> that includes surveillance capabilities and a disaster recovery site that monitors all the data like prices, positions, and volumes to ensure no system manipulation occurs.&nbsp;<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Does_TReDs_Assist_MSMEs\"><\/span>How Does TReDs Assist MSMEs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol>\n<li>Small organisations can use the TReDS platform to raise capital by putting their trade receivables in an auction.<\/li>\n\n\n\n<li>Before the buyer makes the payment, a finance provider or a bank (basically the vendor) bids on the bills from an MSME before the due date.&nbsp;<\/li>\n\n\n\n<li>Post that, the working capital gets allocated to the MSMEs account.&nbsp;<\/li>\n<\/ol>\n\n\n\n<p>This is an excellent platform for MSMEs to meet their constant liquidity needs, and since this is an off-balance sheet transaction, this does not disturb the <a href=\"https:\/\/www.indifi.com\/blog\/5-practices-small-businesses-must-do\/\">financial health of the MSME&nbsp;<\/a><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.indifi.com\/\"><img decoding=\"async\" loading=\"lazy\" width=\"500\" height=\"91\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-3-500x91.jpg\" alt=\"MSME loan for Wholesalers\" class=\"wp-image-5351\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-3-500x91.jpg 500w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-3.jpg 716w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Do_We_Mean_By_Invoice_Discounting\"><\/span>What Do We Mean By Invoice Discounting?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To simply understand what invoice discounting means, imagine it as a series of small loans backed by invoices. The lender (who\u2019s giving you money) is aware that you owe them, but is willing to back you up with most of the invoice amount before your customer pays you.<\/p>\n\n\n\n<p>Essentially, most MSMEs face trouble with working capital requirements as they are dependent on their clients\/customers paying them. This is the exact problem that invoices discounting solves by easing their business by providing loans against invoices.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Next_Steps\"><\/span>Next Steps<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Currently, the platform serves over 10,000 MSMEs. For all MSMEs, registering your business on this platform is one of the best ways to direct the government\u2019s attention to your <a href=\"https:\/\/www.indifi.com\/working-capital-loans-india\">working capital needs<\/a>. You have to go to the<a href=\"https:\/\/www.indifi.com\/blog\/how-to-download-msme-certificate-udyam-certificate-online\/\"> Udyam Portal <\/a>or TReDS portal, enter your basic details, and register for free. More than 6.3 million small businesses are yet to be registered. Do not be one of them.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>What does TReDS stand for?<\/strong><br>TReDS stands for Trade Receivables Discounting System.<\/p>\n\n\n\n<p><strong>What is the objective of TReDS?<\/strong><br>The aim of TReDS is to facilitate MSME sellers in negotiating discounts on invoices submitted to larger businesses, thereby aiding them in managing their working capital requirements.<\/p>\n\n\n\n<p><strong>How many TReDS platforms operate in India?<\/strong><br>Currently, India has three operational TReDS platforms:<\/p>\n\n\n\n<ol>\n<li>RXIL<\/li>\n\n\n\n<li>M1Xchange<\/li>\n\n\n\n<li>InvoiceMart<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>TReDS (Trade Receivables Discounting System) is a RBI-backed digital platform launched in 2018 to help MSMEs convert pending invoices into liquidity instantly. It streamlines working capital across platforms like RXIL, M1Xchange, and Invoicemart. In this comprehensive guide, discover TReDS&#8217; key features, how it works, and how MSMEs can benefit in 2024\u201325. What is TReDS Portal? [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":5515,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[141],"tags":[],"_links":{"self":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/5514"}],"collection":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/comments?post=5514"}],"version-history":[{"count":15,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/5514\/revisions"}],"predecessor-version":[{"id":14842,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/5514\/revisions\/14842"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media\/5515"}],"wp:attachment":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media?parent=5514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/categories?post=5514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/tags?post=5514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}