Sidbi, Axis Bank & others seek exchange-based trading permit

The Reserve Bank today said entities, including Sidbi and Axis Bank, have applied for setting up an exchange-based trading platform to facilitate financing of bills.
Those who have applied to set up trade receivables discounting system (TReDS), include NSE Strategic Investment Corporation (NSIC) and Small Industries Development Bank of India (Sidbi) and Axis Bank, among others, the RBI said.
Others include Trade Receivables Exchange, which is by a group of banking professionals in the financial capital, Mynd Solutions from Gurgaon, DICIC Bank of India from Kolkata, NSDL Database Management and Trade Receivables Exchange from the financial capital.
The RBI had framed the final guidelines for TReDS last December and had given time till March 9 for applications.

To help micro, small and medium enterprises, the RBI permitted setting up of an exchange-based trading platform to facilitate financing of bills raised by such small entities to corporate and other buyers, including government departments and PSUs.
It has insisted on a minimum paid-up equity capital of Rs 25 crore and non-promoters would not hold over 10 percent of the equity capital of TReDS.

RBI said the MSME sector continues to face constraints in obtaining adequate finance, particularly in terms of their ability to convert their trade receivables into liquid funds, which necessitates for such an exchange.
The central bank had insisted on sound technological basis to support operations, ability to provide electronic platform for all the participants and information about bills, discounting and quotes in real time.

Setting up of the proposed TReDS platform follows statement by Governor Raghuram Rajan in September 2013 to facilitate an electronic bill factoring exchange in the country for MSMEs.
Setting up of TReDS platform follows statement by the Governor in September 2013 to facilitate an electronic bill factoring exchange for MSMEs.