As per MSME Ministry, all ₹250 Cr+ companies must register by March 31, 2025.

All about the Government Mandate on TReDS!

1What is the new RBI mandate and MSME Ministry notification about?

● The Ministry of Micro, Small, and Medium Enterprises (MSME) issued a notification on November 7, 2024, mandating that all companies registered in India under the Companies Act 2013 with an annual turnover exceeding ₹250 crore, along with all Central Public Sector Enterprises (CPSEs), must onboard a Trade Receivables Discounting System (TReDS) platform by March 31, 2025. This mandate aims to improve cash flow for MSMEs by enabling faster access to funds.
● Read Gov Order here

2What are the corporate guidelines on how to disclose this information?

Corporates have to report this onboarding/registration in their annual report. The Ministry of Corporate Affairs (MCA) has requested the Institute of Company Secretaries of India (ICSI) to seek a report on compliance with the MSME Notification from the Company Secretaries of the Large Corporates. Accordingly, MCA has cast an obligation on the Company Secretaries, upon registration of the Large Corporates on TReDS Platform, to report the compliance to ICSI in the format prescribed by them.

3Why was this mandate introduced?

This directive was introduced to strengthen financial support for MSMEs by improving their access to early payment and financing options. By lowering the turnover threshold to ₹250 crore, the government intends to include more large corporations, thus increasing liquidity flow to MSMEs.

4Who needs to comply with this mandate?

All corporations with an annual turnover exceeding ₹250 crore, as well as all Central Public Sector Enterprises, are required to comply with this mandate by onboarding a TReDS platform by the March 31, 2025 deadline.

5What is TReDS, and how does it work?

TReDS, or Trade Receivables Discounting System, is an electronic platform regulated by the India’s central bank Reserve Bank of India that facilitates the financing of trade receivables of MSMEs through discounting. Corporations onboarded on TReDS can enable their MSME suppliers to receive early payments by selling their receivables at competitive rates via a price discovery model.

1What role does C2treds play in supporting compliance with this mandate?

C2treds, an RBI-approved TReDS platform powered by C2FO, helps companies comply seamlessly with the mandate. It provides a fully digital onboarding process, competitive financing options, actionable analytics, and a large network of over 250,000+ suppliers, a significant portion of whom are MSMEs.

2What are the benefits of using C2treds for TReDS onboarding?

●C2treds offers benefits such as automated discounting and financing solutions, term extensions of up to 180 days, advanced data-driven analytics, competitive funding costs, and access to C2FO’s extensive supplier network, making it a comprehensive choice for TReDS onboarding.
●Refer to the C2treds brochure here

3Is there a specific deadline for companies to complete the onboarding process?

Yes, per the MSME Ministry notification, all eligible companies must complete their TReDS onboarding by March 31, 2025.

4What resources does C2FO provide to assist companies in onboarding?

C2FO provides dedicated onboarding support through C2treds, including a streamlined digital onboarding experience, personalized assistance for any questions, and guidance on maximizing the benefits of the TReDS platform for cash flow efficiency.

5What happens if a company does not comply by the deadline?

The mandate is legally binding, and non-compliance may attract regulatory scrutiny. While the specifics are not outlined in the notification, adhering to this mandate is important to avoid potential penalties and to contribute to broader financial support for MSMEs.The Ministry of Corporate Affairs (MCA) has requested the Institute of Company Secretaries of India (ICSI) to seek a report on compliance with the MSME Notification from the Company Secretaries of the Large Corporates. Accordingly, MCA has casted an obligation on the Company Secretaries, upon registration of the Large Corporates on TReDS Platform, to report the compliance to ICSI in the format prescribed by them.

Get Started with C2treds

Ready to streamline your payments and grow your business? Joining C2treds is simple. Follow these three easy steps to get started.

1.

Fill the Buyer Onboarding Form: Select "Interested to Join as buyer" on our website

2.

Share & Authenticate Documents: Submit your KYB/KYC documents for quick verification.

3.

Get Onboarded Seamlessly Our expert support team will guide and assist you through the final steps

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