TReDS Invoice Discounting 2026: RBI's ₹250 Crore Buyer Mandate
RBI's new TReDS Master Directions, 2026 lower the mandatory buyer registration threshold from ₹500 crore to ₹250 crore turnover and simplify MSME seller onboarding. Here is what changed, who must register, and what it means for your receivables.
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Legal basis: Reserve Bank of India (Trade Receivables Discounting System) Directions, 2026, issued under the Payment and Settlement Systems Act, 2007 (circular RBI/DPSS/2026-27/406) — Effective: June 23, 2026. Source: https://www.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=13526. Last reviewed by CA Harun Raaj: September 2026.
The Reserve Bank of India issued the RBI (Trade Receivables Discounting System) Directions, 2026 on June 23, 2026, replacing all earlier TReDS circulars with a single framework. Around the same time, the MSME Development (Amendment) Act, 2026 received Presidential assent (August 13, 2026), inserting Section 15A, which makes TReDS onboarding mandatory for Central Public Sector Enterprises (CPSEs) engaged in MSME procurement. Together, these are the most significant changes to invoice discounting regulation since TReDS was authorised in 2014.
Key point: Companies with turnover above ₹250 crore, and all CPSEs procuring from MSMEs, must now register on a TReDS platform, while MSME suppliers face simplified onboarding under the 2026 Master Directions.
What Changed — The Short Version
Three things changed for MSME suppliers and their corporate buyers.
- The mandatory buyer turnover threshold dropped from ₹500 crore to ₹250 crore, bringing more buyer companies into the registration net.
- MSME seller onboarding is simpler — the earlier due-diligence requirement has been removed under the Master Directions.
- Credit guarantee cover from NCGTC is now formally permitted on TReDS transactions, which the Directions expect to support finer discount rates for MSME sellers.
Who Must Register on TReDS — Buyer Mandate
Under Section 15A of the MSME Development (Amendment) Act, 2026 and the corresponding Ministry of MSME notification, the following buyers are mandatorily required to register on at least one RBI-authorised TReDS platform:
- All companies registered under the Companies Act, 2013 with annual turnover exceeding ₹250 crore (reduced from the earlier ₹500 crore threshold).
- All Central Public Sector Enterprises (CPSEs) engaged in procurement from MSMEs, regardless of turnover.
Non-compliance with this mandate attracts penalties under the MSMED Act, 2006.
If your corporate buyer has turnover above ₹250 crore, it is now legally required to register on TReDS. If it has not, the MSME Samadhan portal or your bank relationship manager are the appropriate channels to raise this.
How TReDS Works — Step by Step
TReDS is a digital invoice discounting exchange where MSME suppliers can sell their receivables (unpaid invoices) to financiers at a discount, getting paid in 1–2 business days instead of waiting 30 to 90 days.
- The MSME supplier registers on an authorised TReDS platform (A.TReDS, Invoicemart, or RXIL). Onboarding documentation is simplified — the earlier mandatory due-diligence process is no longer required under the 2026 Directions.
- After delivering goods or services, the supplier uploads the invoice on the platform, and the buyer confirms or accepts it.
- Financiers — banks and NBFCs registered on the platform — bid on the invoice, offering an annualised discount rate (typically 7–10% per annum for creditworthy buyers).
- The MSME accepts the best bid and receives the discounted amount within 1–2 business days.
- On the invoice due date, the buyer repays the financier the full invoice amount directly.
Illustrative example: A Pune-based MSME manufacturer with ₹12 crore turnover supplies automotive components to an auto-ancillary company with ₹400 crore turnover. An invoice of ₹48 lakh is raised on 60-day credit terms. On TReDS, a financier bids at 8% per annum, and the supplier receives roughly ₹47.36 lakh within 2 business days, against a discount of about ₹64,000. Without TReDS, the supplier would either wait 60 days for the full ₹48 lakh or borrow against the invoice from an NBFC at 14–18% per annum. This example is illustrative only — actual rates depend on buyer creditworthiness and platform liquidity.
Three Authorised TReDS Platforms
All three are authorised by RBI under the Payment and Settlement Systems Act, 2007.
Credit Guarantee Integration
The 2026 Master Directions formally permit TReDS platform financiers to avail credit guarantee cover from NCGTC (National Credit Guarantee Trustee Company) and other Government of India-notified guarantee fund trusts against factoring units — a permission that did not explicitly exist under the previous framework. For MSME suppliers, this means financiers face lower credit risk on TReDS transactions, which should translate to finer discount rates and greater willingness to fund invoices on smaller or less-established buyers.
What This Means for Your Business
If you are an MSME supplier: your receivables are now a liquid asset that can be converted to cash within 1–2 business days. If your buyer has ₹250 crore-plus turnover and is not on TReDS, it is expected to be, and onboarding now involves reduced paperwork.
If your company has ₹250–500 crore turnover: you are now within the mandatory registration bracket. Coordinating this with your company secretary and finance team as part of your compliance calendar will help you meet the requirement on time.
If you are a CFO or finance manager: TReDS invoice discounting does not show up as debt on the MSME supplier's balance sheet — it is an off-balance-sheet factoring transaction and does not consume working-capital credit limits.
I'm CA Harun Raaj, Visakhapatnam. If your company now falls within the ₹250 crore mandate, or you're an MSME supplier looking to structure your receivables through TReDS, reach out and we'll work through it with you.
---
See Also
Frequently Asked Questions
What is the new buyer turnover threshold for mandatory TReDS registration?
Under the RBI (Trade Receivables Discounting System) Directions, 2026, companies registered under the Companies Act, 2013 with annual turnover exceeding ₹250 crore must register on a TReDS platform, down from the earlier ₹500 crore threshold.
Are CPSEs required to register on TReDS regardless of turnover?
Yes. Section 15A of the MSME Development (Amendment) Act, 2026 makes TReDS registration mandatory for all Central Public Sector Enterprises engaged in procurement from MSMEs, irrespective of their turnover.
Has MSME seller onboarding on TReDS become easier?
Yes. The RBI (Trade Receivables Discounting System) Directions, 2026 remove the earlier mandatory due-diligence requirement for MSME seller onboarding on authorised TReDS platforms.
Can TReDS financiers now use NCGTC credit guarantee cover?
Yes. The 2026 Master Directions formally permit TReDS platform financiers to avail credit guarantee cover from NCGTC and other Government of India-notified guarantee fund trusts against factoring units, a permission not explicitly available under the previous framework.
Which platforms are authorised to run TReDS in India?
Three platforms are authorised by RBI under the Payment and Settlement Systems Act, 2007: A.TReDS (M1xchange), promoted by SIDBI and NSE; Invoicemart, promoted by M-Junction (SAIL and Tata); and RXIL, promoted by NSICL and NSE.
What happens if my ₹250 crore-plus buyer has not registered on TReDS?
Non-compliance with the mandatory registration requirement attracts penalties under the MSMED Act, 2006. MSME suppliers can raise this with the MSME Samadhan portal or their bank relationship manager.
Does TReDS invoice discounting affect a company's working-capital credit limits?
No. TReDS discounting is an off-balance-sheet factoring transaction and does not show up as debt or consume the MSME supplier's existing working-capital credit limits.
Can NBFCs participate as financiers on TReDS platforms?
Yes, the RBI TReDS framework permits both banks and NBFCs registered with RBI to participate as financiers on authorised TReDS platforms.
Need help with this?
Our team handles the paperwork. You focus on your business.