SIDBI, Axis Bank seek nod for exchange-based trading

The Reserve Bank of India on Wednesday said entities, including Small Industries Development Bank of India (SIDBI) and Axis Bank, have applied for setting up an exchange-based trading platform to facilitate financing of bills.

Those who have applied to set up trade receivables discounting system (TReDS), include NSE Strategic Investment Corporation (NSIC) and SIDBI and Axis Bank, among others, the RBI said. Others include Mynd Solutions from Gurgaon, DICIC Bank of India from Kolkata, NSDL Database Management and Trade Receivables Exchange from the financial capital. The RBI had framed the final guidelines for TReDS in ecember last and had given time till March 9 for applications.

To help micro, small and medium enterprises, the RBI permitted setting up of an exchange-based trading platform to facilitate financing of bills raised by such small entities to corporate and other buyers, including government departments and PSUs.

It has insisted on a minimum paid-up equity capital of Rs.25 crore and non-promoters would not hold over 10 per cent of the equity capital of TReDS.

The RBI said the MSME sector continues to face constraints in obtaining adequate finance, particularly in terms of their ability to convert their trade receivables into liquid funds, which necessitates for such an exchange.

Axis Bank