HSBC’s Indian subsidiary just made a trade finance transaction with Indian giant Reliance Industries (RIL), that has kind of set a new record in India. The reason for that is, this transaction was enabled via blockchain technology.
HSBC, the global banking and financial services firm, was involved in the transfer a blockchain-powered letter of credit (LoC) transaction by RIL, regarding export to Tricon Energy, a US client of the company. The use of blockchain brought down the cost of the transaction and also reduced the time it took for the transaction to be facilitated.
The transaction solution was possible only via the use of blockchain with an electronic bill of lading (eBL) platform dubbed Bolero. The Bolero eBL system is a platform founded in 2016, that allows the issuance and management of electronic bills of lading. It also encourages and facilitates digital transfers of goods titles from sellers to buyers in a trade.
This new system is symbolic of the effects of globalisation and modernisataion that is bringing all the global export market interactions under one platform and bridging borders.
A couple of days ago, another blockchain initiative was pioneered by HSBC. A number of global banks including Standard Chartered, BNP Paribas and UK based HSBC came together to launch a blockchain platform that would help solve some of the issues of financing in international trade. This new platform is being called eTrade Connect, and it has allegedly brought down the time period of loans being approved in, from 36 hours to 4 hours.
RIL’s joint chief financial officer Srikanth Venkatachari has pointed out one of the primary features of the new blockchain usage. That is, that the new system is significantly cutting down precious time, that is wasted in organizing and managing export documentation, from the “extant seven-ten days to less than a day.” This is major change that would go a long way in saving time and prompting quick paperpwork.
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