Despite Modi’s push, PSUs avoid TReDS

Why read this story?

Editor's note: On 7 September, the chairmen and managing directors of more than 200 public sector companies received a stern notice from the finance ministry’s Department of Public Enterprises, according to an industry executive who asked not to be named.  “The position regarding usage of TReDS has been recently reviewed and it has been observed that your company has been largely inactive on the TReDS platform… You are therefore requested to ensure active participation of your company on TReDS platform on a regular basis and send a compliance report by 30th September,” the notice read. TReDS, short for Trade Receivables Discounting System, is a flagship platform launched in 2017 to help MSMEs, or micro, small and medium-sized enterprises, get access to credit. It was billed as a way to revitalize lending to smaller businesses, which are often underserved by the banking system. Which would, in turn, unlock economic growth across the country. In 2018, the finance ministry ordered all eligible public sector enterprises owned by the central government to register on the platform, along with their entire network of MSME vendors. For …