Regarding the Trade Receivables Discounting System (TReDS) infrastructure in India, consider these statements: Statement 1: The platform automatically generates a Factoring Unit representing a legally enforceable debt obligation of the buyer once the counterparty accepts the uploaded invoice. Statement 2: Under current regulations, transactions are strictly without recourse to the MSME seller, meaning the financier bears the entire credit risk of the buyer, often mitigated via credit insurance integrations. Statement 3: Financing rates on TReDS are primarily determined by the credit rating of the corporate buyer rather than the MSME seller, and bank discounting qualifies for Priority Sector Lending (PSL) targets. Which of the assessments is most accurate?

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Economics · Banking and Financial Institutions

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

All Statement 1, Statement 2, and Statement 3 are correct.

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Answer 1

Only Statement 1 and Statement 2 are correct.

Answer 2

Only Statement 2 and Statement 3 are correct.

Answer 3

Only Statement 1 and Statement 3 are correct.

Answer 4

All Statement 1, Statement 2, and Statement 3 are correct.

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