Another Mukesh Ambani premiere: Reliance Industries uses chain of chains for payment to export

A chain of block-enabled letter of credit transaction facilitated a shipment between Reliance and US Tricon Energy. (File photo)

In a premiere in India, HSBC, a major UK banking group, completed a trade finance transaction involving the export by Reliance Industries to a US customer using the blockchain, which which has significantly reduced the time required for document processing. The blockchain-enabled letter of credit facilitated the sending of an order between Reliance and the US company Tricon Energy, according to a joint statement issued by HSBC India and Reliance.

export documents of the remaining seven to ten days to less than one day, "said Srikanth Venkatachari, RIL's finance officer, quoted in the statement. The blockchain platform has been integrated with the electronic bill of lading (eBL) platform to issue and manage an electronic bill of lading, he said, adding that this allowed for a digital transfer of the vendor's merchandise title to the bill of lading. 39, buyer in the underlying trade.

The statement stated that the solution was a significant improvement for any organization involved in the international buying and selling of goods, as it brought all parties together on the same platform. . Blckchain Solutions is a distributed database that manages an ever growing list of ordered records called blocks. It is considered very transparent because all stakeholders can view progress in real time. A large number of domestic lenders, including ICICI Bank, SBI and Yes Bank, are working on blockchain-type solutions and consider trade finance as one of the best-use cases of technology because of the ability to save time.

HSBC head Hitendra Dave said the blockchain had a transformative impact on foreign trade finance transactions, which allowed for greater transparency and security, in addition to simplifying and simplifying it. make it faster. Apart from that, it can ensure profitability, speed up work and potentially free cash for businesses, he added. For this transaction between Reliance and Tricon, the LC was issued by ING Bank, Brussels, for Tricon Energy US, with HSBC India as a consulting and trading bank for Reliance, stating that the transaction would validate the commercial and operational viability of the channel. of chains. In 1965, explaining the current system, buyers and sellers use paper letters of credit to substantiate transactions and physical documents are sent to each party to the transaction by mail, courier or fax. While the current system offers a high degree of certainty, the time and cost of document processing is a deterrent for exporters. HSBC has announced that it wants, along with five other banks globally supporting the "Corda application", to expand the network on an open source basis in order to foster its adoption by the entire industry.