The Indian subsidiary of the large global banking and financial services company HSBC and the Indian giant Reliance Industries (RIL) have completed a blockchain-enabled trade finance operation, according to Indian business daily The Hindu Business Line on Sunday 4 November.
The credit letter operation (LoC) with blockchain, which is said to be the first of its kind in India, involved the export by RIL to the US customer Tricon Energy, which reduced sufficiently both the times that the costs of processing documentation. The new system represents a significant improvement in the interactions of the global export market by bringing all the parties together on a single platform, observes The Hindu Business Line.
According to the article, the transaction solution was implemented through the integration of blockchain with an electronic invoicing platform (eBL) dubbed Bolero. Introduced for the first time in November 2016, the Bolero eBL system allows the issuance and management of electronic bills of lading, as well as allowing the digital transfer of goods from sellers to buyers in a trade.
RIL Chief Financial Officer Srikanth Venkatachari commented that the new blockchain deployment has shown significant potential to reduce the timing involved in managing export documentation from "seven to ten days to less than a day".
Earlier this week, a group of major global banks, including HSBC based at U.K., BNP Paribas and Standard Chartered, launched a blockchain platform to tackle international trade finance. The platform, called eTrade Connect, is able to reduce the time required to approve commercial loan applications from 36 to four hours.
In May of this year, the international newspaper Financial Times reported on HSBC the completion of the first global commercial finance transaction powered by blockchain. The transaction involved a LoC for the United States Cargill Food and Agricultural Conglomerate.