Skip to main content

MSMEs In Defence Sector May Get Working Capital Financing Boost With TReDS Integration


Defence Secretary Ajay Kumar has initiated a discussion wherein MSME vendors will be connected to TReDS
These vendors supply all kinds of arsenal and protective military gear such as gloves and helmets to defence forces

The initiative aims to help solve working capital financing related issues for such vendors
India’s Defence Production Policy of 2018 (DPrP-2018) is a key part of the mission to boost exports and reduce the trade deficit. The Indian government has set a goal of becoming among the top five global producers of the aerospace and defence manufacturing with an annual export target of $5 Bn by 2025. A key role here is being played by the MSME vendors who supply all kinds of arsenal and protective military gear such as gloves and helmets to defence forces.
These MSMEs are state-owned suppliers. However, they often struggle to manage their working capital requirements as the contractual payouts to them often get delayed due to limited treasury allocations.
Recently an ET report highlighted that to help such vendors, defence secretary Ajay Kumar has initiated a discussion wherein these vendors will be connected to TReDS (Trade Receivables Discounting System). “We want the defence ministry to be the “pioneering government department” to be on-boarded onto TReDS,” Kumar said.
The discussions are at an early stage and the process has its own challenges considering the vendors need a NACH-compliant bank account to come onboard. Also, as per current law, defence ministry can only transact through a treasury account with the State Bank of India and NACH mandates cannot be given through these accounts.
A centralised online exchange being set up under the approval of Reserve Bank of India (RBI), the TReDS platform facilitates the financing of trade receivables of MSMEs from corporate and other buyers, including government departments and public sector undertakings (PSUs), through multiple financiers on a pan-India basis.

On November 24, 2015, Reserve Bank of India (RBI) granted “in-principle” approval to three companies to set up TReDS. 

Source : Inc42

Comments

Post a Comment

Popular posts from this blog

Border brawl: China choppers were in air

Indian Air Force's Sukhoi 30 fighter aircraft  (File picture) Two helicopters of the Chinese People’s Liberation Army hovered close to the Line of Actual Control in eastern Ladakh on May 5 and Indian Air Force fighter jets had also been airborne at the same time during a face-off between soldiers near the Pangong lake, sources in the army headquarters said on Tuesday. The latest revelations come at a time there has been an escalation in tension in pockets of the disputed frontier. “The Indian Air Force is regularly carrying out sorties of its Sukhoi 30 fighter aircraft in the Ladakh sector amid the simmering tension with China in the region. During the face-off last week, two Chinese choppers had come close to the border but there was no air space violation. The IAF’s Sukhoi 30 fighter jets were also airborne at the same time but it was routine flying and not in response to Chinese helicopters,” a source said. Chinese PLA Choppers Spotted Near LAC; IAF Rushes Fighter Jets To Ladakh...
Post a Comment
Read more

Indian Army looking for new armoured vehicles for Ladakh, Tata among contenders

Humvee and American Stryker Infantry Combat Vehicle are the two others who are also being considered by the Indian Army to deliver such vehicles. Photo of a Tata Defence Combat Light Armored Multi Role Vehicle Seeking to provide highly mobile armoured protection vehicles to its soldiers in high altitude terrains like Eastern Ladakh, the Indian Army is looking to choose from three different vehicles including the indigenous Tata Wheeled Armoured Protection along with American Stryker Infantry Combat Vehicle and Humvee. The Indian Army has a need for armoured infantry combat vehicles for quick movement of troops in the Eastern Ladakh area where the Chinese have deployed their armoured personnel carriers in large numbers. The force is looking at the three options which include the Tata WhAP and the American Stryker and Humvee, defence sources told ANI. The options are being evaluated by the force at the moment and a decision in this regard would be taken soon, they said. Sources said duri...
Post a Comment
Read more

‘Disengagement an intricate process, needs constant verification’: Army

The government’s high-powered China Study Group (CSG) on Wednesday reviewed the latest developments in eastern Ladakh, with focus on the next stage of disengagement between the Indian and Chinese armies following the 14-hour meeting between senior military commanders.   The focus of the current round of military talks is to hammer out a consensus on easing tensions between the two armies in the Finger Area and Depsang plains as well as pulling back weapons and equipment from friction points in other sectors.(PTI) India and China remain committed to “complete disengagement” which is an “intricate process” and “requires constant verification”, the Indian Army said in a statement on Thursday, two days after senior military commanders from both sides met at Chushul to discuss the road map for reducing tensions along the contested Line of Actual Control (LAC). “The senior commanders reviewed the progress on implementation of the first phase of disengagement and discussed further step...
Post a Comment
Read more