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TReDS Mandate 2025: Big Businesses Must Onboard for MSME Growth!

In recent years, MSMEs have faced significant liquidity challenges due to payment delays, increasing the need for efficient financing solutions. The Trade Receivables Discounting System (TReDS) addresses this issue by providing an electronic platform for MSMEs to access immediate cash flow. It enables multiple financiers to bid on their trade receivables from corporates, government departments, and PSUs, facilitating quicker payments.

Now, the Government has issued an MSME Notification, which states that all companies with turnover exceeding Rs. 250 Crores shall register themselves on the TReDS platform before 31^st March 2025.

Let’s understand the details.

Notification dated as of 7th November 2024

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MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES NOTIFICATION

New Delhi, the 7th November, 2024

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S.O. 4845(E).—In exercise of powers conferred by section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) and in supersession of the notification of the Government of India, in the Ministry of Micro, Small and Medium Enterprise numbers S.O. 5621(E), dated the 2nd November 2018 and S.O. 5622(E), dated the 2nd November 2018, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section(ii), the Central Government hereby issues the following instructions, namely:-

All companies registered under the Companies Act, 2013 (18 of 2013) with a turnover of more than Rs. 250 crore (two hundred and fifty crore rupees) and all Central Public Sector Enterprises shall be required to get themselves onboarded on the Trade Receivables Discounting System platforms, set up as per the notification of the Reserve Bank of India.

2. The onboarding process on the Trade Receivables Discounting System platforms shall be completed by 31st March 2025.

[F. No. 16/8/2018-E- P &G/Policy]

Dr. RAJNEESH, Addl. Secy. and Development Commission

Key features

The following entities shall get themselves registered mandatorily on TReDS:

Companies registered under the Companies Act, 2013 (18 of 2013) with a turnover of more than Rs. 250 crore; and
Central Public Sector Enterprises.

The onboarding process on the TReDS platform shall be completed by 31st March 2025 by such entities.
TReDS is an electronic platform for facilitating the financing/discounting of trade receivables of Micro, Small, and Medium Enterprises (MSMEs) through multiple financiers. Learn more about TReDS.

The mandatory onboarding of companies with a turnover exceeding ₹250 crores onto the TReDS platform marks a significant step toward improving liquidity for MSMEs. By ensuring timely payments and enhancing cash flow, this initiative will strengthen the financial ecosystem for small businesses. With the deadline set for March 31, 2025, eligible entities must comply with the regulation to support a more transparent and efficient trade receivables system. Embracing TReDS will not only benefit MSMEs but also contribute to a healthier and more resilient business environment.

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