Chennai : Indian Overseas Bank on Thursday entered into Trade Receivables Discounting System (TReDS) platform, provided by Receivables Exchange of India Limited (RXIL), to accelerate the credit flow to MSME sector.
TReDS is an automated system driven platform which will enable the MSMEs to auction their trade receivables at competitive interest rates through a transparent bidding process in which multiple financiers will participate.
Under this arrangement both the sellers and buyers of the bank will be benefitted by discounting the trade receivables.
The MSME seller will have quicker realization of their receivables at a competitive interest rate to ease out their liquidity problems.
For the buyer too, the advantages would be compliance with MSMED Act 2006, stable supplier base and better terms with MSME vendors.
This initiative will also benefit the Indian Overseas Bank in broadening its MSME customer base as well as reduce transaction costs. (ANI)