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TRADE RECEIVABLES DISCOUNTING SYSTEM (TReDS)

April 2018 January 2017


Precursor to TReDS

 NTREES – an online bill discounting platform, was being


operated by NSE with SIDBI as a single financier since 2009

 NTREES was based on Reverse Factoring model followed by


NAFIN in Mexico

 RBI floated a concept paper for launching Electronic Bill


Discounting Exchange in 2013

 RBI issued TReDS guidelines on December 3, 2014

 NSE and SIDBI jointly applied to operate the TReDS Exchange

 NSE – SIDBI receives in-principle approval from RBI on


December 2, 2015
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What is TReDS?
TReDS is a digital platform for MSMEs to auction
their trade receivables at competitive rates through
online bidding by Financiers

The objective is to address the critical needs of


MSMEs
Financing trade receivables based on Buyers credit rating
Promptly finance trade receivables

Settlement - NPCI (RBI Settlement System)


NPCI NACH supports many-to-many situation
Reversal of unsettled transactions handled automatically
and resolves issues related to reconciliation of payments.

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About RXIL

Dates Details
02-Dec-2015  In-principle approval from Reserve Bank of India (RBI) to
launch and operate TReDS Exchange
25-Feb-2016  RXIL – a joint venture between National Stock Exchange of
India (NSE) and SIDBI
 Incorporated as a public limited company
01-Dec-2016  RXIL receives approval from RBI to launch TReDS
Exchange
09-Jan-2017  RXIL launches India’s First TReDS Exchange
 Successfully executes the MSME vendor trade receivable
transaction
10-Jan-2017  Successfully completes settlement of Leg1 – Financier
making the payment to the MSME Vendor
 Successfully completes settlement of Leg2 – Buyer making
the payment to the MSME Vendor

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RXIL - Shareholders

Shareholders

Small Industries Development Bank of India (Promoter)

NSE Strategic Investment Corporation (Promoter)

State Bank of India

SBI Capital Markets Ltd.

ICICI Bank Limited

ICICI Securities Ltd

YES Bank Limited

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TReDS Participants

Enterprises as per
MSMED Act, 2006
Seller

Financier Buyer
PSUs, Corporates &
Banks & NBFC Factors
Govt. Depts.

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Registration – Documents Required

KYC Statutory & Bank


Registration Entity KYC
Individuals Financials Details

KYC Form
Application Annual Report
KYC Form
Form (2 years) Auto Debit
Mandate
PAN Card

Letter of
Authorisation / Shareholding
Address Proof Identity Proof
Board Pattern
Resolution
Certificate of
Incorporation Cancelled
Master
Agreement and Cheque Leaf
Address Proof GST Reg. No
General Terms
& Conditions MOA & AoA

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Buyer – Seller Link

Buyer creates link and MSME Vendor accepts the link

Cost Split details


Default Cost Bearer (in case Buyer &
Cap Rate
(Seller) Seller agree to share
financing cost)

Default Credit
Transaction Charge Period & details of
Bearer (Seller) Extended Credit
Period, if any

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TReDS Process Flow

Counterparty
Shipment of Goods Seller/Buyer Uploads
(Buyer/Seller) Accepts
from Vendor to Buyer Invoice
Invoice Online

Cost Bearer
RXIL Generates In Auction - Financiers
(Seller/Buyer) Accepts
Obligations Bid
Bid

Leg2 – Buyer Pays


Leg1 – Financier Pays Leg3 – Buyer Pays
Financier
Vendor (T+1) Vendor (Unfinanced)
(Due Date)

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Goods/Services
Invoices Invoices
Uploaded Uploaded

MSME Vendor Buyer

Counterparty Counterparty
Approval Approval

Bid Obligation Bid


Acceptance
Bid Acceptance MSME Buyer

MSME Vendor Buyer Repayment to


Payment Financier

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Key Benefits

Benefits MSMEs Corporates Financiers


Online Hi-tech digital platform   
Without Recourse to Vendor 
Based on Buyers Credit Rating  
Right to Accept Bids (Cost Bearer)  
Immediate Payment  
Lower Operational Cost   
Compliance with MSMED Act, 2006 
Lower Supply Chain Cost 
Stable Supplier Base 
Priority Sector Lending Benefits 
Lower cost for New Customer Acquisition 
Cross Selling Products 

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TReDS Arrangement

Financier

MSME Seller RXIL Buyer

Sponsor Bank

Seller’s Buyer’s
Designated NPCI NACH
Debit & Credit
Designated
WC Bank Bank Account
Account

Financier’s
Designated
Bank Account
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TReDS Platform Timings

Activity From To
TReDS platform 9:00 AM 9:00 PM
Auction Period 1 day 5 days
Auction Timing 9:00 AM 9:00 PM
Auction Cutoff Timing (T+1) Settlement 4:00 PM
Leg 1 Settlement – Financier to pay Seller T+1 T+1
Leg 2 Settlement – Buyer to pay Financier Due Date Due Date

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Financier On-boarded with RXIL
27 Financier registered as on date
State Bank of India ICICI Bank Ltd
Bank of Baroda Yes Bank
Bank of India IDFC Bank
IDBI Bank Ltd Federal Bank Ltd
Dena Bank Standard Chartered Bank
Union Bank of India SBI Global Factors Ltd
Oriental Bank of Commerce CanBank Factors Ltd
Indian Overseas Bank Suryodaya Small Finance Bank
United Bank of India Punjab National Bank
Canara Bank Bank Of Maharashtra
Syndicate Bank Indian Bank
Allahabad Bank Andhra Bank
UCO Bank Corporation Bank
Central Bank of India
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Participation - Fees & Charges

Fees / MSME
Buyer Financiers
Charges Vendor

Registration Fee
Rs. 25,000 Rs. 10,000 Rs. 75,000
(One time)

Annual Fee*
Rs. 25,000 Rs. 10,000 Rs. 75,000
(Yearly)

NIL
Transaction (considering 0.35 % p.a. NIL
Charges Vendor is bearing
the Cost)

*1st year annual charges waived 15


THANK YOU…
Receivables Exchange of India Limited (RXIL)
Exchange Plaza (NSE), B2 Wing, 2nd Floor,Plot C1,
G Block, Bandra Kurla Complex, Bandra East,
Mumbai – 400051
Mobile: +91 9867531571
Email: kk.varodia@rxil.in
Website: www.rxil.in * www.treds.in

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