HSBC Holdings Plc carried out a trade finance transaction in a first for India using blockchain for an export by Reliance Industries Ltd (RIL) to Tricon Energy based in the US. The letter of credit (LC) transaction allowed by the blockchain significantly reduced the time taken for these transactions, RIL said in a press release. “The use of blockchain offers significant potential to reduce the timelines involved in exchanging export documentation from the existing 7-10 days to less than one day,” said Srikanth Venkatachari, joint chief financial officer at RIL.
Reliance receives first LC payment from India via blockchain
The transaction allowed a digital transfer of the seller’s title of goods to the buyer. ING Bank for Tricon Energy USA (importer) issued the letter of credit with HSBC India as the RIL advising and negotiating bank.
HSBC ‘s Head of Global Banking and Markets, Hitendra Dave, said the use of blockchain has a huge effect on trade finance transactions and, in addition to making it easier and quicker, allows for greater transparency and improved protection.
Explaining the current system, Reliance said buyers and sellers are currently using paper-based credit letters to back up transactions and physical documents are sent to each party in the transaction by email, courier or fax. Although the current system offers a high degree of certainty, the time and costs involved in processing the documents are deterrent to exporters.
Post Disclaimer
This article is for informational purposes only. The information is provided by Reliance receives first LC payment from India via blockchain and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. The Blockchain Cafe does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Source: https://theblockchaincafe.com/reliance-receives-first-lc-payment-from-india-via-blockchain/
