India is exploring freshly developed technologies such as Blockchain. That country seems interested in indulging in emerging technology, as British banking major, HSBC’s Indian subsidiary and India’s massive conglomerate holding company Reliance Industries (RIL) have completed a blockchain-enabled trade finance transaction.
Reportedly, for the first time in India, the blockchain backed letter of credit (LoC) transaction was done by RIL to U.S. client Tricon Energy. This method of transactions has significantly decreased process cost and most importantly the money.
As given in the Hindu Business Line, the operation was accomplished by the utilization of blockchain along with an electronic bill of lading (eBL) platform dubbed Bolero. In detail, the Bolero eBL system enables for the issuance and management of electronic bills of lading and also can help to digitally transfer goods titles from sellers to buyers in a trade.
Regarding this transaction, RIL’s joint chief financial officer Srikanth Venkatachari stated, “The use of blockchain offers significant potential to reduce the timelines involved in the exchange of export documentation from the extant seven-ten days to less than a day.”
Indian financial institutes turning to blockchain as banks such as ICICI Bank, SBI and Yes Bank are focussed on deploying blockchain solutions and count trade finance as one of the best use cases for the technology. The primary factor behind this is to reduce the required time.
With that, HSBC’s head of global banking and markets Hitendra Dave commented that blockchain has a transformative effect on trade finance transactions and allows more transparency and improved security in addition to making it simpler and faster.
He further added that it could ensure cost-effectiveness, faster turnaround and also potentially unlock liquidity for businesses.
The new system contributes to a vast advancement in global export market interactions by bringing all parties together on one platform.