TReDS: Creating A Transparent Ecosystem for Sellers, Buyers And Financiers Alike

By Vibha
Posted On March 5, 2025

TReDS Registration Compulsory For Large Corporates

As per a new directive by the Indian government, corporates with a turnover of INR 250 crore or more have to mandatorily register on the TReDS portal. This move will ease out cash flow constraints for sellers and invoice financing. For buyers, sellers, and financiers alike, mandatory TReDS registration will transform the way transactions and working capital cycles are managed.

TReDS (Trade Receivables Discounting System), an electronic platform facilitates the financing of trade receivables for Micro, Small, and Medium Enterprises (MSMEs) from corporate buyers. As it is RBI-regulated and mandated by the GoI, large corporates have an obligation to toe the line, ensuring sellers receive timely payments while financiers are set to get access to high-quality invoices for discounting.

The Role Of TReDS In Business Transactions

The TReDS portal creates a transparent ecosystem where sellers can easily upload their invoices, buyers can approve them, and multiple financiers can bid on them to provide competitive rates and in-turn early payment solutions. This process is set to make payment delays a thing of the past. It is not only about strengthening MSME cash flow, but significantly reducing dependency on traditional credit channels.

With mandatory onboarding, large corporates must complete their TReDS registration and actively participate in transactions. This will not only significantly improve the liquidity of smaller businesses but also benefit buyers and financiers.

Bringing Buoyance To Buyers 

For large corporates, TReDS registration is a compliance requirement. In the long run, this will ensure buyers gain substantial operational and financial advantages.

Benefits For Buyers:

  • Better relationships – Timely payments result in better trust and working relationship with MSME sellers.
  • Optimised cash flow – Invoice discounting enables better working capital management, reducing the burden of short-term liabilities.
  • Cost savings – MSMEs come up with competitive pricing to improve liquidity, leading to cost efficiencies for corporate buyers.
  • Operational efficiency – Digital platform reduces administrative workload.

Challenges For Buyers:

  • System integration: Large corporations will have to train their workforce about the newly mandated TReDS portal and also integrate the TReDS portal with their existing ERP and accounting systems.
  • Vendor onboarding: Ensuring sellers are aware of and actively participating in TReDS transactions can require education and outreach.

Significance for Sellers

For MSMEs, long payment cycles or delayed payments have clogged their potential and growth. The mandatory large corporates registration on TReDS guarantees that sellers are about to gain access to timely payments.

Benefits For Sellers:

  • Access to funds: Sellers get immediate working capital by selling their invoices.
  • Lower financial burden: No collateral or additional debt, as factoring is based on unpaid invoices.
  • Regulatory protection: TReDS platforms operate under RBI guidelines, ensuring security, transparency, and fair practices.
  • Faster approvals: Digital processes reduce paperwork and speed up the entire process.
  • Lower Cost of Financing: Invoice discounting through the TReDS portal is often cheaper than traditional bank loans or other credit options.

Challenges For Sellers:

  • Adoption hurdles: Unfamiliarity with the TReDS platform and may need guidance on onboarding.

Fulfilling Financiers Dream

Financiers (banks and NBFCs), play a pivotal role in the TReDS ecosystem. With large corporates getting onboarded, financiers can leverage TReDS platform to gain access to a wider pool of high-value, low-risk invoices.

Benefits For Financiers:

  • Access to quality invoices – TReDS gives financiers a steady flow of low-risk and verified invoices from creditworthy corporate buyers.
  • Investment opportunities – Financiers earn competitive returns by financing MSME invoices at discounted rates.
  • Portfolio diversification – Getting a wide range of MSME receivables reduces risk concentration and enhances financial stability.
  • Transparent transactions – Being a digital platform, TReDS ensures transparency, reducing credit and operational risks.

Challenges For Financiers:

  • Competition in Bidding: With multiple financiers bidding, margins may shrink for those unable to offer competitive rates.

How to Complete TReDS Registration

Whether you are a large corporate, seller, or financier getting onboarded to a TReDS platform is easy. Here is an overview of the onboarding process:

  • Choose a TReDS platform: Select a RBI-approved TReDS platforms such as DTX.
  • Submit the documents: A comprehensive list of documents is mentioned on the portal. The key documents needed for onboarding are KYC, financial statements, business registration details, and other necessary documents.
  • Complete the registration process: Submit the documents and wait for verification and approval.
  • Start transactions: Once approved, you are done with registration. Now sellers can upload invoices, buyers can approve them, and financiers can bid and start funding.

TReDS, The Gamechanger 

Making TReDS onboarding mandatory for corporates with INR 250 crore and more turnover is a strategic move to help MSMEs prosper with improved cash flow and financial inclusivity. TReDS portal will soon rewrite the new way of businesses handling trade receivables..

TReDS helps buyers to instill trust and build better relationships with sellers. For sellers, it gives them cash flow and much-needed financial stability. Without a doubt, it opens new avenues of portfolio diversification and high-yield investment for financiers.

The time to get onboarded on TReDS is now. Register today and comply with RBI guidelines and leverage the benefits of TReDS. Drive a new growth story filled with transparency, and financial efficiency in your business.