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ARTICLE · 09 JULY 2026

Update – Framework For Trade Receivables Discounting System (“TReDS”) Platforms

DSK Legal
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The Reserve Bank of India has issued comprehensive Master Directions for Trade Receivables Discounting System (TReDS) platforms, introducing significant changes to capital requirements, operational obligations, and participant eligibility. These new regulations mandate a minimum net worth of INR 25 crore for platform operators, formalize the role of credit guarantee funds, and establish that all factoring units must be strictly "without recourse" to MSME sellers, fundamentally reshaping the framework for tr

IndiaFinance and Banking
Anjan Dasgupta
Anjan Dasgupta
Avinash Kumar Khard
Avinash Kumar Khard
Roochi Loona
Roochi Loona
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Background:

  • Earlier this year, the Reserve Bank of India (“RBI”) had released the Reserve Bank of India (Trade Receivables Discounting System) Directions, 2026 on April 08, 2026 (“Draft TReDS Directions”) for comments and inputs from all stakeholders.
  • Pursuant to notification dated June 23, 2026 (RBI/DPSS/2026-27/406), RBI has issued the Reserve Bank of India (Trade Receivables Discounting System) Directions, 2026 (“Master Directions TReDS”).
  • The MasterDirections TReDS were issued under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007, and have come into effect from the date of notification.
  • The Master Directions TReDS will be applicable to entities authorised by the RBI to operate the TReDS platforms under the Payment and Settlement Systems Act, 2007.

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