It is understood that many banks have their own vendor finance platforms akin to TReDS where they are undertaking factoring transactions on without recourse basis to MSME and with recourse to the corporate. Since two entities licensed under TReDS have become operational, it is expected that it will lead to better price discovery and more favorable rates for MSMEs .
In addition, Basel II sets standards for risk measurement and management and for related disclosures that will give banks ongoing incentives to improve their practices in these areas. Indeed, we have already seen significant progress in risk measurement and management at many banks in the United States and elsewhere as a result of the Basel II development process.