RBI Expands Scope Of Trade Receivables Discounting System (TReDS)

1. INTRODUCTION

The Reserve Bank of India ("RBI") by way of notification dated June 7, 2023 ("Notification") has expanded the scope of the Trade Receivables Discounting System¹ ("TReDS") as prescribed under the Guidelines for the Trade Receivables Discounting System, 2014² ("TReDS Guidelines"). The RBI had in its Statement on Developmental and Regulatory Policies dated February 8, 2023³ proposed the expansion of scope of the TReDS with an aim to further ease operation of the TReDS, including: (a) introduction of insurance facility; (b) permitting all entities eligible under the Factoring Regulations Act, 2011 ("FRA") to enter into TReDS transactions; and (c) enabling secondary market operations on TReDS platforms.