RBI increases NACH Mandate Limit for TReDS Settlements to Rs.3 crore

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Mumbai : The Reserve Bank of India (RBI) has increased the NACH mandate limit to ₹ 3 crore for TReDS settlements from the existing cap of Rs.1 crore.

“To encourage innovation and competition through increased participation, ‘on-tap’ authorisation of TReDS operators was introduced by Reserve Bank in October 2019. Effective July 1, 2020 the Central Government has revised the definition of MSMEs with linkage to their annual turnover as well. Keeping in view the growing liquidity requirements of the MSMEs and the requests received from the TReDS platforms, it is proposed to increase the NACH mandate limit to ₹ 3 crore for TReDS settlements” RBI governor Shaktikanta Das said.

Trade Receivables Discounting System (TReDS) facilitates discounting / financing of receivables of Micro, Small and Medium Enterprises (MSMEs). TReDS settlements are carried out through mandates in the National Automated Clearing House (NACH) system. Presently the amount of the NACH mandate is capped at ₹ 1 crore.

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