New Delhi, July 10 (IANS): The Central government has made it mandatory for all operating Central Public Sector Enterprises (CPSEs) to route the settlement of invoices for goods and services procured from Micro, Small and Medium Enterprises (MSMEs) through Trade Receivables Discounting System (TReDS) platforms authorised by the Reserve Bank of India, according to an official statement issued on Friday. The notification also requires CPSEs to disclose details of MSME invoices routed and settled through TReDS as specified by the RBI and obtain a statutory auditor’s certificate confirming TReDS registration and compliance during annual audits. The move is aimed at improving payment discipline and positioning CPSEs as role models for timely payments to MSMEs.
The initiative is expected to address long-standing payment delays faced by MSMEs by enabling them to convert approved invoices into cash before the due date through collateral-free financing at competitive interest rates. Under the TReDS framework, banks and NBFCs competitively bid to discount invoices, providing quicker access to working capital without recourse to the seller. The notification, issued on June 30, 2026, implements a key announcement made in the Union Budget 2026-27. MSMEs, which account for over 8.70 crore registered enterprises and employ more than 38 crore people, are a critical pillar of the Indian economy. TReDS, operational since 2017, is an RBI-regulated electronic platform designed to facilitate financing and discounting of MSME trade receivables from corporate buyers, government departments and public sector undertakings.