Government Mandates TReDS for Settlement of MSME Invoices by CPSEs

Through a gazette notification dated June 30, 2026, the Ministry of Micro, Small and Medium Enterprises (MSMEs) has mandated the use of the Trade Receivables Discounting System (TReDS) as a transaction settlement platform by Central Public Sector Enterprises (CPSEs). Invoices in respect of procurement of goods or services from MSMEs shall now be routed through any TReDS platform authorised by the Reserve Bank of India.

Such routing shall not be construed as mandating discounting of such invoices, and the supplier has the option to avail itself of financing or discounting of its receivables. Further, operating CPSEs have to disclose the details of invoices routed and settled through TReDS and ensure a certificate from their statutory auditors that they are registered with at least one TReDS platform and are in compliance with the guidelines of this notification during annual audits.

The move aims to curb the issue of delayed payments regularly faced by the sector, constraining operations and growth. Moreover, suppliers have the option to convert approved invoices into cash well before the due date since financing on TReDS is collateral-free and without recourse to the seller. Banks and NBFCs bid competitively to discount invoices and offer working capital within a short span of time at competitive rates of interest. Five platforms are currently operational: RXIL, M1xchange, Invoicemart, C2treds and DTX.