Company owned by the richest man in India turns into Blockchain for Trade Finance


Oil and Gas Conglomerate Reliance Industries – owned by India's richest person, Mukesh Ambani – used the blockchain to conduct its first commercial financing operation.

According to a HSBC India press release shared with CoinDesk on Sunday, Reliance Industries recently performed a blockchain-powered "live" financial transaction in collaboration with the US-based global chemical distributor, Tricon Energy.

The end-to-end transaction was facilitated by the banking majors HSBC India and ING Bank, Brussels, and carried out on the Rare blockchain platform of the R3 consortium, the version adds.

The Corda platform was integrated with a platform provided by Bolero International, a U.K.-based commercial finance digitization company, and was used to issue and manage an electronic bill of lading.

Using the blockchain platform, a letter of credit was issued by ING Bank for Tricon Energy USA (the importer) with HSBC India as a consulting and trading bank for Reliance Industries, India (the exporter), explains the statement. A letter of credit is a bank guarantee for the payment of a buyer to a seller.

The head of HSBC India for the banking and global markets, Hitendra Dave, said:

"The use of blockchain is an important step towards the digitalization of trade: the overall efficiency that makes trade finance guarantees a cost-benefit ratio, a faster turnaround and potentially unlocks liquidity for companies".

Currently, importers and exporters use paper credit letters to support transactions, with each party sending documents by post or fax. This manual process not only slows down the pace of trade, but also increases costs.

The trade finance platform operated by blockchain, on the other hand, aims to digitize that process, thus saving time and costs.

"The use of blockchain offers significant potential to reduce the timing involved in the exchange of export documentation from 7 to 10 days to less than a day," said Srikanth Venkatachari, Chief Financial Officer at Reliance Industries.

Image of Mukesh Ambani via World Economic Forum / Wikimedia

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