|
The Ministry of Micro, Small and Medium Enterprises (MSME) has mandated all operating Central Public Sector Enterprises (CPSEs) to settle invoices of MSME suppliers through the Trade Receivables Discounting System (TReDS), a move aimed at ensuring faster payments and improving access to collateral-free working capital for small businesses.
The ministry said the notification, issued on June 30, 2026, fulfils a key announcement made in the Union Budget 2026-27 and is expected to address one of the biggest challenges faced by MSMEs--delayed payments. Under the new framework, all invoices raised by MSMEs on CPSEs will be routed through RBI-authorised TReDS platforms, allowing suppliers to receive financing against approved invoices before the due date. The ministry said the measure is expected to improve liquidity for lakhs of MSME suppliers by enabling quicker access to working capital without collateral. Financing on TReDS is provided without recourse to the seller, with banks and non-banking financial companies (NBFCs) competitively bidding to discount invoices, helping MSMEs receive funds within a short period at competitive interest rates. The ministry has also introduced measures to improve transparency and accountability. CPSEs will be required to disclose details of MSME invoices routed and settled through TReDS in line with RBI guidelines and obtain a statutory auditor's certificate confirming TReDS registration and compliance during annual audits. According to the ministry, the mandate is also expected to set a benchmark for timely payment discipline across corporate India by positioning CPSEs as role models for large buyers. MSMEs remain a key pillar of the Indian economy, with more than 8.70 crore enterprises registered on the Udyam Registration Portal and Udyam Assist Platform, providing employment to over 38 crore people. The release added that delayed payments have continued to constrain the sector by locking up working capital and affecting business growth. TReDS, an RBI-regulated electronic platform operational since 2017, facilitates financing and discounting of MSME trade receivables from corporate buyers, government departments and public sector undertakings through competitive bidding by multiple financiers. According to the ministry, invoice discounting through the platform has increased from Rs 40,000 crore in FY22 to Rs 3.47 lakh crore in FY26, reflecting its growing adoption. (ANI)
|
