Answer-What is a 'Factoring Unit' (FU) within the operational workflow of a digital TReDS platform, and how...

A Factoring Unit FU is the digital asset traded on a TReDS platform. It contains details of the invoice or bill of exchange evidencing the sale of goodsservices. TReDS allows both models when the MSME seller uploads the invoice, it constitutes standard Factoring when the corporate buyer uploads it to facilitate early payment for its vendors, it is termed Reverse Factoring. Once uploaded, it requires digital acceptance by the counterparty before going live for financier bidding.

Question

What is a "Factoring Unit" (F

U within the operational workflow of a digital TReDS platform, and how is it created?

A It is a credit rating report generated by an external rating bureau for the MSME seller.

B It is a standardized electronic nomenclature representing a confirmed invoice or bill of exchange, which can be created by either the MSME seller (Factoring) or the buyer (Reverse Factoring).

C It is a pool of multiple unapproved invoices bundled together by the platform operator to diversify risk.

D It is a digital escrow wallet managed by the RBI to route interbank settlement clearances.

E It is a unique tax token generated exclusively by the GST Network (GSTN) to authorize international export shipments.

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What is a "Factoring Unit" (F

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