The Central government has directed Central Public Sector Enterprises (CPSEs) to process payments for goods and services from Micro, Small, and Medium Enterprises (MSMEs) through TReDS platforms authorized by the Reserve Bank of India. CPSEs are now required to reveal details of MSME invoices settled via TReDS as per RBI guidelines and to secure a statutory auditor’s certificate of TReDS registration and compliance annually.
This initiative aims to establish CPSEs as examples of prompt payment practices for major corporate buyers nationwide. It seeks to address the issue of delayed payments encountered by MSMEs, offering them quick access to working capital at competitive interest rates. By channeling all CPSE invoices through TReDS, MSME suppliers can convert approved invoices into cash well before the due date, benefiting from collateral-free financing with competitive bidding by banks and NBFCs.
The notification, issued on June 30, 2026, implements a significant announcement from the Union Budget 2026–27. MSMEs play a crucial role in the Indian economy, with over 8.70 crore enterprises registered on the Udyam portals and employing more than 38 crore individuals. TReDS, an RBI-regulated electronic platform operational since 2017, facilitates financing and discounting of trade receivables owed to MSMEs by corporate buyers, government entities, and public sector organizations through competitive bidding.
