Ans. Yes, authorisation is required to be obtained from RBI under the Payment and Settlement Systems (PSS) Act, 2007.

Ans. Eligibility criteria for the purpose of setting up and operating a TReDS platform is provided in the guidelines (as amended from time to time) for TReDS issued by RBI. These guidelines are available at the following path: www.rbi.org.in → “Payment and Settlement Systems” dropdown →“Guidelines”. RBI’s Press Release dated October 15, 2019 may also be read in this regard. The same can be accessed at the following web links: /en/web/rbi/-/guidelines-for-the-trade-receivables-discounting-system-treds-3504 and /en/web/rbi/-/press-releases/on-tap-authorisation-of-payment-systems-48405

Ans. List of all authorised Payment System Operators (PSOs), including TReDS, is available at the following path: www.rbi.org.in → “Payment and Settlement Systems” dropdown → “Information Useful to Customer” → “List of Authorised Entities – Payment System Operators”. Following is the web link for accessing the same: /en/web/rbi/-/publications/certificates-of-authorisation-issued-by-the-reserve-bank-of-india-under-the-payment-and-settlement-systems-act-2007-for-setting-up-and-operating-payment-system-in-india-12043

Ans. Yes. The KYC process adopted by the TReDS entities shall adhere to the “Master Direction – Know Your Customer (KYC) Direction, 2016” dated February 25, 2016 (as amended from time to time) issued by RBI.

Ans. A settlement file provides information as to how much amount has to be debited from and credited to the accounts of participants (sellers, buyers and financiers), due on a particular date / time. In other words, it indicates how much a financier has to pay to an MSME seller, and how much a buyer owes to the financier on a particular date / time. The TReDS entities generate the settlement file and send the same to existing payment systems (for instance, National Automated Clearing House) for actual payment of funds.

Ans. No. Default handling is outside the purview of TReDS platforms.