Reserve Bank of India (Trade Receivables Discounting System) Directions, 2026
UR
- Applies toCompanies RBI has authorised to operate a Trade Receivables Discounting System (TReDS) platform for financing MSME trade receivables
- StatusIn force
- IssuedJun 23, 2026
- Amendmentsnone tracked
- Length46 points in 3 sections · 4 min read
The four dates on this rule
- PublishedJun 23, 2026The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyJun 23, 2026The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- Last date to actMarch 31, 2028The day by which the work this rule asks for must be finished.
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What it says
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Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
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Chapter I. Preliminary
Background
1. Called the 2026 TReDS Directions
This is RBI's 2026 Direction on TReDS platforms.
2. Effective immediately
It came into force with immediate effect.
3. Who this Direction covers
This Direction covers entities RBI has authorised to run TReDS platforms.
4. Meaning of Buyer
Buyer means whoever must pay the seller's invoice.
5. Meaning of Factoring
Factoring has the meaning given in the Factoring Regulation Act, 2011.
6. Meaning of Factoring Unit
A factoring unit is the invoice or bill uploaded to the platform.
7. Meaning of Financier
A financier is any entity allowed to do factoring business under FRA.
8. Meaning of Seller
Only an MSME, as the MSMED Act defines it, can be a seller.
9. Meaning of TReDS
TReDS is a digital platform for factoring trade receivables through many financiers.
10. Assignment and receivable
Assignment and receivable carry the meaning FRA gives them.
Chapter II. Authorisation
Must know
1. RBI authorisation is required first
An entity must get RBI authorisation to run a TReDS platform.
2. Must be an Indian company
The platform operator must be an Indian company.
3. Charter must cover TReDS
The company's own charter must cover running a TReDS platform.
4. Regulated entity's 45-day window
A regulated entity must apply within 45 days of getting its no-objection certificate.
5. Foreign investment follows FDI rules
An entity with foreign investment must follow India's FDI and forex rules.
6. Minimum net worth ₹25 crore
An applicant needs a minimum net worth of ₹25 crore.
7. Existing platforms' deadline
Existing platforms must meet this net worth test by March 31, 2028.
8. Net worth stays ongoing
The minimum net worth must be kept up at all times.
Chapter III. Conduct of Business
Must know
1. Platform checks genuineness
It must check that every uploaded invoice is genuine.
2. Accepted units are enforceable
An accepted factoring unit is as enforceable as a signed paper instrument.
3. Buyer must pay on time
The buyer must pay on the due date, no excuses.
4. No set-off over goods disputes
The buyer cannot set off a payment over a goods dispute.
5. Seller declares no prior finance
The seller must declare no other financier has already funded these goods.
6. Assignment filed with CERSAI
The platform must file each assignment with the CERSAI registry.
7. KYC on buyers
The platform must run KYC checks on buyers under RBI's own rules.
8. Platform confirms an MSME seller
The platform must confirm the seller is a genuine MSME.
9. Funds credited to seller only
Seller funds must go only into the seller's own account.
10. Buyer pays financier on time
The buyer pays the financier directly on the due date.
11. No recourse to the seller
Sellers are not liable if a discounted invoice later fails.
12. TReDS not liable for default
TReDS is not responsible if the buyer defaults.
13. Seller never pays the premium
The seller must never pay the insurance premium.
14. No prudential benefit from cover
This credit insurance gives no prudential capital benefit.
15. Settlement via an authorised system
The platform must settle payments using an authorised payment system.
Do it
16. Platform brings participants together
The platform brings everyone together to upload, bid and settle invoices.
17. Transparent bidding among financiers
The platform runs a transparent bidding process among financiers.
18. Working capital banks told
It must tell the buyer's and seller's working capital banks.
19. Buyer notified of assignment
It must notify the buyer that the invoice is now assigned.
20. A unit can be re-discounted
A financier may re-discount a unit to another financier.
21. Guarantee from a government fund
A financier may get a guarantee from a government credit fund.
22. Platform keeps custody of agreements
The platform keeps custody of every Master agreement.
23. System can also carry fees
The same settlement system can also handle insurance and fee payments.
Background
24. Who may participate
Sellers, buyers, financiers, insurers and a government credit trust may all take part.
25. Disputes stay outside TReDS
Disputes between participants are not TReDS's own concern.
Chapter IV. Other Provisions
1. Returns listed in the Annexure
The platform must send RBI the returns listed in the Annexure.
2. Old TReDS guidelines repealed
This Direction repeals the old TReDS guidelines and circulars.
3. Past approvals stay valid
Old approvals and actions stay valid under this new Direction.