Introducing DTX

1. Who can participate as a seller in TReDS?

Only MSMEs can participate as sellers in TReDS.

2. How does DTX benefit MSME sellers?

DTX enables MSME sellers to receive prompt payments by discounting their trade receivables through multiple financiers, thereby improving cash flow and reducing the need for collateral.

3. What is a Factoring Unit (FU)?

A Factoring Unit (FU) is a standard term used in TReDS for invoice(s) or bill(s) of exchange. Each FU represents a confirmed obligation of the buyer.

4. Who can create an FU?

In TReDS, an FU can be created either by the MSME seller or the buyer. If the MSME seller creates it, the process is called factoring; if the buyer creates it, it is called reverse factoring.

5. Are transactions on DTX with recourse to MSME sellers?

No, the transactions processed under TReDS are without recourse to the MSMEs.

1. Who can participate as a buyer in TReDS?

Corporates, Government Departments, PSUs, and any other entity can participate as buyers in TReDS.

2. How does DTX benefit buyers?

DTX allows buyers to manage their payables efficiently, improve supplier relationships by ensuring timely payments, and potentially negotiate better terms with suppliers.

3. What is reverse factoring?

In reverse factoring, the buyer initiates the process by creating an FU on the platform, which is then accepted by the seller. This facilitates the financing of the seller's receivables.

4. What are the obligations of buyers on DTX?

Buyers are required to accept or reject the FUs within a stipulated time frame and ensure payment to the financier on the due date.

1. Who can participate as a financier in TReDS?

Banks, NBFC-Factors, and other financial institutions permitted by the Reserve Bank of India can participate as financiers in TReDS.

2. How does DTX benefit financiers?

DTX provides financiers with access to a wide pool of MSME receivables, allowing them to diversify their portfolios and meet priority sector lending requirements.

3. What is the process for financiers on DTX?

Financiers can view accepted FUs on the platform, bid for discounting them, and upon selection, disburse funds to the MSME sellers. They receive payments from buyers on the due date.

4. How is the settlement process handled?

DTX generates a settlement file indicating the amounts to be debited and credited to the accounts of participants. This file is sent to existing payment systems (e.g., National Automated Clearing House) for the actual transfer of funds.