India’s First Cross-border transaction to Reliance
Major global banking and financial services firm HSBC, India and ING Bank, Belgium have successfully executed India’s first cross-border financial transaction with Reliance Industries and US based Tricon Energy, via R3’s Corda blockchain platform.
The transaction allowed a digital transfer of the title of goods from the seller to the buyer in the underlying trade. The transfer of title was made possible by the integration of electronic bill of lading (eBL) platform and a blockchain-based trade finance platform. eBL system allows for the issuance and management of electronic bills of lading, as well as enables digital transfers of goods titles from sellers to buyers in a trade.
ING Bank issued the Blockchain enabled Letter of Credit (LC), first of its kind in India for the importer — Tricon Energy, USA with HSBC India as the advising and negotiating bank for exporter- Reliance Industries, India.
Hitendra Dave, head global banking and markets at HSBC said, “The use of blockchain 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”.
At present buyers and sellers use paper-based letters of credit (LCs) to complete transactions, which have to be sent to each party by post, courier or fax increasing costs and time. To solve this problem RIL joint chief financial officer Srikanth Venkatachari said, Blockchain can cut down these costs and reduce these timelines involved in exchange of documents from the “extant seven-ten days to less than a day”.
Earlier this week, a group of major Global Banks like HSBC, BNP Paribas, Standard Chartered Bank and 2 other banks are supporting R3 Corda Platform to address the financing of international trade and drive adoption across the industry.
