Ministry of Micro, Small and Medium Enterprises has issued instructions mandating the use of the Trade Receivables Discounting System (TReDS) as a transaction settlement platform by Central Public Sector Enterprises (CPSEs). The instructions apply to all operating CPSEs and, in certain respects, to other authorities, bodies, or entities notified by the Central Government.

“(i) all operating CPSEs shall, in respect of procurement of goods or services from the micro, small and medium enterprises, route the settlement of invoices through any TReDS platform authorised by the Reserve Bank of India; Provided that the routing of invoices by CPSEs through the TReDS platform shall not be construed as mandating discounting of such invoices and the micro, small and medium enterprise supplier shall have the option to avail or not avail financing or discounting of its receivables on the platform;

(ii) all operating CPSEs or any other authority, body or entity notified by the Central Government shall disclose the details of invoices of micro, small and medium enterprises routed and settled through TReDS, in the form and manner as specified by the Reserve Bank of India;

(iii) all operating CPSEs mandated to ensure a certificate from their statutory auditors that they are registered with at least one TReDS platform and are in compliance with guidelines of this notification, during their annual statutory audit.”