HAL becomes first PSU to transact on TReDS

What in news:

The Receivables Exchange of India (RXIL) and Hindustan Aeronautics (HAL) has become the first public sector enterprise to make a transaction on the "TReDS platform"

About news:

According to the NSE-SIDBI joint venture, TReDS 

is an online electronic institutional mechanism for facilitating the financing of trade receivables of micro, small and medium enterprises (MSME) through multiple financiers.

Hindustan Aeronautics Ltd (HAL) executed its first digitized invoice discounting transaction on RXIL TReDS 

platform, when it accepted the digital invoice uploaded by Narendra Udyog, a Nasik based MSME (micro category) vendor earlier this week

"This makes HAL the first PSU to transact on TReDS across platforms.

The transaction was financed by Bank of Baroda and since stands settled.

Last year, the central government mandated all major PSUs to join TReDS platform to facilitate payments to MSME vendors.

RXIL is a TReDS platform operating since January 2017 and is promoted by the National Stock Exchange, Small Industries Development Bank of India, State Bank of India, ICICI Bank and Yes Bank.

About RXIL:

Receivables Exchange of India Ltd (RXIL), is a joint venture promoted by Small Industries Development Bank of India (SIDBI), the apex financial institution for promotion and financing of MSMEs in India and National Stock Exchange of India Limited (NSE), the premier stock exchange in India.

RXIL has been incorporated under the Companies Act, 2013 on February 25, 2016.

RXIL operates the Trade Receivables Discounting System (TReDS) Platform as per the TReDS guideline issued by RBI on December 3, 2014.

RXIL is the first entity to receive the approval from Reserve Bank of India (RBI) on December 01, 2016 to launch India's First TReDS Exchange.

 

Expected prelims question:

TReDS related to

a)    Facilitate the financing of trade receivables of MSMEs

b)    Online pharmaceutical portal

c)     Newly developed submarine

d)    None of above

Ans - a

Expected mainsquestion:

Critically analyse the benefits oftransaction on the "TReDS platform"