Receivables Exchange of India Ltd (RXIL) was incorporated in 2016 as a joint venture between Small Industries Development Bank of India (SIDBI) and the ______.
National Stock Exchange of India Limited
Understanding Receivables Exchange of India Ltd (RXIL)
Receivables Exchange of India Ltd (RXIL) is an important entity in India's financial ecosystem, specifically within the framework of the Trade Receivables Discounting System (TReDS). TReDS is an online platform that facilitates the financing/discounting of trade receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers.
Formation of RXIL: A Joint Venture
The question asks about the formation of RXIL, specifically naming one of its founding partners, Small Industries Development Bank of India (SIDBI), and asking for the other joint venture partner. Joint ventures bring together different entities to pool resources and expertise for a common goal. In the case of RXIL, the goal was to establish one of the first platforms for TReDS in India.
RXIL was indeed incorporated in 2016. Its formation was a collaborative effort between SIDBI, a principal development financial institution for the promotion, financing, and development of the Micro, Small and Medium Enterprises (MSME) sector in India, and another key player in the Indian financial market.
Let's look at the options provided:
- United Stock Exchange of India
- National Stock Exchange of India Limited
- Calcutta Stock Exchange
- Bombay Stock Exchange
To determine the correct joint venture partner alongside SIDBI, we need to identify which of these entities partnered with SIDBI to incorporate RXIL.
Identifying the Joint Venture Partner
Research indicates that RXIL was established as a joint venture between SIDBI and the National Stock Exchange of India Limited (NSE). This partnership brought together SIDBI's focus on MSMEs and NSE's expertise in managing large-scale financial platforms and exchanges.
Therefore, the other founding joint venture partner for Receivables Exchange of India Ltd (RXIL) alongside Small Industries Development Bank of India (SIDBI) is the National Stock Exchange of India Limited.
Analyzing the Options
- United Stock Exchange of India: While a stock exchange, it was not the partner in the formation of RXIL.
- National Stock Exchange of India Limited: This entity, commonly known as NSE, is a major stock exchange and was indeed a founding partner of RXIL with SIDBI.
- Calcutta Stock Exchange: A regional stock exchange, not involved in the formation of RXIL.
- Bombay Stock Exchange: Another major stock exchange (BSE), but NSE was the partner with SIDBI for RXIL.
Based on the historical formation of RXIL, the correct partner is the National Stock Exchange of India Limited.
| Entity | Role in RXIL Formation |
|---|---|
| Small Industries Development Bank of India (SIDBI) | Joint Venture Partner, Focus on MSMEs |
| National Stock Exchange of India Limited (NSE) | Joint Venture Partner, Platform Expertise |
Revision Table: Key Facts about RXIL
| Aspect | Detail |
|---|---|
| Full Form | Receivables Exchange of India Ltd |
| Incorporation Year | 2016 |
| Primary Purpose | Operates a TReDS platform for MSME receivables discounting |
| Joint Venture Partners | SIDBI and National Stock Exchange of India Limited (NSE) |
Additional Information on TReDS and RXIL
The Trade Receivables Discounting System (TReDS) was introduced by the Reserve Bank of India (RBI) to address the challenges faced by MSMEs in getting their invoices discounted. Delayed payments are a significant issue for small businesses. TReDS platforms like RXIL allow MSME suppliers to upload their invoices against corporate buyers and get them financed by banks and other financial institutions through an auction mechanism.
- How TReDS Works:
- MSME Supplier raises invoice to Corporate Buyer.
- MSME Supplier uploads invoice on TReDS platform (like RXIL).
- Corporate Buyer approves the invoice on the platform.
- Multiple financiers (banks, NBFCs) bid to discount the invoice.
- MSME Supplier accepts the best bid and receives discounted payment.
- Financier gets payment from the Corporate Buyer on the invoice's due date.
- Benefits of TReDS:
- For MSMEs: Faster access to working capital, reduced payment cycle, better negotiation power.
- For Buyers (Corporates): Potential for better terms, easier payment processing.
- For Financiers: New asset class, potential for good returns.
RXIL was one of the initial entities to receive approval from the RBI to operate a TReDS platform, playing a crucial role in implementing this system designed to benefit the MSME sector.
Important Questions from Agreements and MoU
Which one of the following was the venue of the 2nd BRICS Youth Summit of the Ministers, Officials and Youth Delegations?
With which of the following countries did India sign an agreement in February 2021 for the construction of Lalandar (Shatoot) Dam?
'Industry 4.0' is a complex cyber-physical system which synergies production with digital technologies. The Ministry of Railways and the Department of Science and Technology have joined hands in partnership with which institution for taking up a unique project on 'Industry 4.0'?
Prime Minister Narendra Modi visited Bangladesh in March 2021 in connection with the commemoration of three events. Which of the following is NOT one of them?
All branches of Allahabad Bank will function as branches of __________ following the amalgamation of the two lenders as per Reserve Bank of India (RBI)'s notification dated March 28, 2020.
