In a first of its kind for India, HSBC and ING Bank Brussels have facilitated the trade finance transition with Reliance Industries and Tricon energy by using blockchain. It has enormously lessened the time taken for the processing of the documents.
Srikanth Venkatachari, the RIL joint chief financial officer stated “The use of blockchain offers significant potential to reduce the timelines involved in the exchange of export documentation from the extant seven-ten days to less than a day”
The Blockchain platform was incorporated with the digital invoice of lading (eBL) platform to manage and challenge the digital invoice of lading. Within the underlying platform, this allows a digital switch of the title of products from the vendor to the client.
Blockchain acts as a distributed database that looks after the growing record of ordered information known as blocks. All of the stakeholders can view progress actual time due to its clarity.
Between Reliance Industries and Tricon Energy(USA), the blockchain allowed the Letter of Credit(LC) transaction. The HSBC India serve as the advising and negotiating bank for Reliance industries and ING Bank issued the LC for Tricon Energy. On R3’s Corda blockchain platform, the end-to-end transaction was executed.
At present, buyers and sellers make use of paper-based LCs to underpin truncations and each party in the transaction got the physical documents by post, fax or courier.
The current system offers a great amount of certainty. Both time and cost occupied in processing the documents are limits for exporters.
HSBC India, Hitendra Dave, the Head-Global Banking and Markets said,
“The use of blockchain is a significant step towards digitizing trade and enables greater transparency and enhanced security in addition to making it simpler and faster.”
He further added that any organization involved internationally in buying and selling goods will experience considerable improvement as all parties will be on one platform due to this solution.
Six other banks – BNP Paribas, NatWest, Standard Chartered, Bangkok Bank, CTBC Holding and SEB along with R3, HSBC, ING prefer the Corda application. Across the industry, they plan to expand the network on an open source basis to drive adoption.
The Blockchain technology ensures secure and transparent validation of transactions that is beneficial for many industries. Bacancy provides you the dexterous, competent and experienced blockchain developers who can certainly give you perfect solution for your blockchain application development projects.