Business
Seven seek RBI licence to operate trade financial system
Chennai, March 25
Seven entities, including
Axis Bank and SIDBI, have applied for licences to set up and operate
Trade Receivables Discounting System (TReDS) - an institutional
arrangement to meet financing needs of micro, small and medium
enterprises (MSME) through discounting their trade receivables, said the
Reserve Bank of India on Wednesday.
The list of applicants for
setting up TReDS released by the Reserve Bank of India (RBI) are: NSE
Strategic Investment Corporation Ltd. (NSIC), and Small Industries
Development Bank of India (SIDBI), Mumbai; Trade Receivables Exchange
(Group of Banking Professionals), Mumbai; Axis Bank Ltd.; Mynd Solutions
Pvt. Ltd., Gurgaon; DICIC Bank of India, Kolkata; NSDL Data base
Management Ltd. (NDML), Mumbai; and Trade Receivables Exchange (T-REX),
Mumbai.
The RBI had invited applications for setting up of and
operating TReDS. The last date for receiving applications was February
13, which was extended up to March 9.
In December 2014, the RBI came out with its guidelines for setting up and operating TReDS.
According
to the guidelines issued by the RBI, the start-up capital for TReDS
outfits will be a minimum of Rs.25 crore and entities other than
promoters will not be permitted to have shareholding over 10 percent of
the equity capital.
The guidelines said the promoters/promoter groups should be "fit and proper" to operate TReDS.
The
RBI would assess the "fit and proper" status of the applicants on the
basis of their past record of sound credentials and integrity; financial
soundness and track record of at least five years in running their
businesses.
It may also seek feedback on the applicants on these
or any other relevant aspects from other regulators, and enforcement and
investigative agencies like Income Tax, the Central Bureau of
Investigation (CBI), the Enforcement Directorate, the Securities and
Exchange Board of India and others.
Since technology is going to
play an important role in operations, the RBI has stipulated that TReDS
shall be able to provide electronic platform for all the participants
and information about bills/invoices, discounting and quotes should be
communicated on real time basis.
The TReDS shall have a suitable
Business Continuity Plan (BCP) including a disaster recovery site and
also have an online surveillance capability to monitor positions, prices
and volumes in real time so as to check system manipulation, it said.