Oil and gas conglomerate Reliance Industries – in hands of India’s richest person, Mukesh Ambani – has used blockchain to conduct its first initial trade finance transaction transfer.
In line with a recent news release by a local news media ‘HSBC India,’ Reliance Industries has recently conducted a live blockchain-powered trade finance transaction transfer unitedly with US-based international chemical distributor Tricon Energy.
The end-to-end transfer was expedited by banking majors HSBC India and ING Bank, Brussels, and administered on enterprise consortium R3’s Corda blockchain platform, the report added.
The Corda platform was integrated with a platform provided by U.K.-based trade finance digitisation firm Bolero International, and was accustomed to issue and manage an electronic bill of shipment.
The release further added that employing the blockchain platform, a letter of credit was issued by ING Bank for Tricon Energy USA [the importer] with HSBC India as the advising and negotiating bank for Reliance Industries, India [the exporter]. A letter of credit is a bank guarantee for a buyer’s payment to a vendor.
HSBC India’s head for international banking & markets, Hitendra Dave, aforementioned:
“The use of blockchain may be a vital step towards digitising trade. the overall potency it brings to trade finance ensures value effectiveness, faster turnaround and probably unlocks liquidity for businesses.”
Currently, importers and exporters use paper-based letters of credit to underpin transactions, with every party causation documents either by post or fax. This manual method not solely slows the pace of trade, however conjointly also increase the prices.
The blockchain-powered trade finance platform, on the opposite hand, is aimed to digitise that process, thereby saving time and price.
Adding further, Srikanth Venkatachari, joint chief financial officer at Reliance Industries stated:
“The use of blockchain offers vital potential to scale back the timelines concerned in exchange of export documentation from the existent 7 to 10 days to less than just a day.”