HSBC India and ING Bank Brussels have successfully executed a blockchain enabled, live trade finance transaction jointly with Reliance Industries and Tricon Energy.
This is an industry first as the Blockchain platform integrated with Bolero’s electronic Bill of Lading (eBL) platform to issue and manage an electronic Bill of Lading. This allowed a digital transfer of the title of goods from the seller to the buyer in the underlying trade. It further enabled the underlying trade to be fully digitised.
The end-to-end transaction was executed on R3’s Corda blockchain platform which is a single shared application, rather than requiring multiple isolated digital systems across various counterparties, located around the globe. The Letter of Credit (LC) was issued by ING Bank for Tricon Energy USA (importer) with HSBC India as the advising and negotiating bank for Reliance Industries, India (exporter). This solution is a significant improvement for any organisation involved in buying and selling goods internationally, as it truly brings together all parties onto one platform.
Mr. Hitendra Dave, Head-Global Banking & Markets, HSBC India said, “The use of blockchain is a significant step towards digitising trade. It has a transformative impact on trade finance transactions and enables greater transparency and enhanced security in addition to making it simpler and faster. The overall efficiency it brings to trade finance ensures cost effectiveness, quicker turnaround and potentially unlocks liquidity for businesses. We’re delighted to partner with Reliance Industries and support enhanced digitisation in trade finance. We believe that the collaborative approach adopted to develop this technology has the potential to transform conventional trade finance.”
Mr.Srikanth Venkatachari, Joint Chief Financial Officer, Reliance Industries said, “We are excited to partner with HSBC on digitalisation of trade finance. This reflects our continued commitment to embrace emerging technologies and industry first initiatives. The use of blockchain offers significant potential to reduce the timelines involved in exchange of export documentation from the extant 7 to 10 days to less than a day.
When adopted at scale, it helps in significant optimisation of working capital. Further, use of blockchain in trade finance enhances transparency, security and synergy across all the parties and stakeholders involved.”
This transaction validates the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation.
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