Banking · MSME Financing
Which feature best distinguishes the primary objective of the Trade Receivables Discounting System (TReDS) within the MSME sector?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1TReDS is managed by the Reserve Bank of India (RBI), whereas traditional discounting is managed by commercial banks.
- 2TReDS facilitates the discounting of trade receivables (invoices/bills) on an electronic platform for MSME sellers.✓
- 3TReDS is exclusively for discounting import bills, while traditional discounting is for domestic trade.
- 4TReDS mandates non-recourse finance, whereas traditional discounting is typically with recourse.
Correct answer
TReDS facilitates the discounting of trade receivables (invoices/bills) on an electronic platform for MSME sellers.
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