Financial services firm HSBC India and ING Bank Belgium together deployed blockchain to accelerate a trade-finance deal involving Mukesh Ambani-led Reliance Industries, The Economic Times reported.
"The letter of credit was issued by ING for Tricon Energy USA (importer), with HSBC India as the advising and negotiating bank for Reliance Industries (exporter)," HSBC said in the report.
The deal shows, said HSBC, that technologies like blockchain can replace paper-based documentation for trade finance and cut the delay associated with the process.
Separately, the report said that eight lenders are working with US-based blockchain firm R3 to drive the adoption of the digital ledger across industry verticals. The eight financial firms are: ING, HSBC, Bangkok Bank, BNP Paribas, CTBC Holding, Natwest, Swedish bank SEB and Standard Chartered.
In May, HSBC and ING had executed a trade finance transaction for international food and agriculture conglomerate Cargill, using R3’s blockchain platform, Corda.
Trade finance usually takes 5-10 days, but HSBC and ING said they executed the deal in 24 hours.
“What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure,” said Vivek Ramachandran, global head of innovation and growth at HSBC’s commercial banking unit.
“The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses,” Ramachandran said.
Interestingly, IBM is also working on a blockchain prototype with shipping giant Maersk and other clients.