RBI issues Trade Receivables Discounting System Directions, provides rationalisation and harmonisation of existing regulatory framework
The Reserve Bank of India (RBI) has issued the Trade Receivables Discounting System (TReDS) Directions, 2026, replacing and harmonising the existing regulatory framework to improve the efficiency of invoice financing for MSMEs. The final directions, issued after considering stakeholder feedback on the draft released in April 2026, rationalise the regulatory framework by removing the due diligence requirement for MSME sellers, revising the capital requirements for TReDS operators, and providing authorised entities with greater flexibility to frame operational and procedural guidelines within the regulatory framework. Effective immediately, the new Directions aim to simplify compliance, strengthen the TReDS ecosystem, and facilitate smoother financing of trade receivables while enhancing operational efficiency.
