The central financial institution on Wednesday permitted all establishments that undertake factoring enterprise to take part as financiers in TReDS.
“This is able to increase the provision of financiers on the TReDS platform,” RBI mentioned.
The regulator additionally allowed taking insurance coverage cowl for invoicing services on the TReDS platform which might help financiers to hedge default dangers.
Accordingly, insurance coverage corporations are permitted because the “fourth participant” in TReDS, apart from MSME sellers, patrons and financiers. The insurance coverage facility is prone to encourage discounting of payables of patrons no matter their credit score rankings.
These steps have been taken according to the proposals introduced on the February financial coverage assembly.The central financial institution has additionally allowed secondary market transactions on the TReDS platform.
