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RBI expands scope of TReDS, includes insurers as participants
RBI expands scope of TReDS, includes insurers as participants
The Reserve Bank of India (RBI) has authorized insurance companies to operate in the trade receivable discounting system (TReDS) in a bid to solve low-rated buyers’ payment challenges. TReDS facilitates various parties like sellers, buyers and financiers making it a preferred mode of financing for Micro Small and Medium Enterprises (MSMEs). The platform processes transactions worth $8.3bn annually, but insurers' participation on the platform will aid financiers with credit needs to hedge default risks. The RBI circular stated that the stage at which insurance facility is to be availed will be specified by the operators of TReDS.
The Reserve Bank of India (RBI) has authorized insurance companies to operate in the trade receivable discounting system (TReDS) in a bid to solve low-rated buyers’ payment challenges. TReDS facilitates various parties like sellers, buyers and financiers making it a preferred mode of financing for Micro Small and Medium Enterprises (MSMEs). The platform processes transactions worth $8.3bn annually, but insurers' participation on the platform will aid financiers with credit needs to hedge default risks. The RBI circular stated that the stage at which insurance facility is to be availed will be specified by the operators of TReDS.