HSBC, ING Execute India’s First Blockchain Trade Finance Transaction

News | November 5, 2018 By:

Two major banks have successfully completed India’s first live trade finance transaction using blockchain.

HSBC India and ING Bank Brussels jointly announced that they have executed a blockchain enabled, live trade finance transaction for a deal involving an export by Indian energy giant Reliance Industries to US-based Tricon Energy. To facilate the transaction, the banks integrated R3’s Corda blockchain with Bolero’s electronic Bill of Lading (eBL) platform, which allowed digital transfer of the title of goods from the seller to the buyer in the underlying trade and enabled the underlying trade to be fully digitized. The letter of credit (LC) was issued by ING Bank for Tricon with HSBC India as the advising and negotiating bank for Reliance.

Hitendra Dave, head of global banking and markets at HSBC India, said that the use of blockchain is a significant step towards digitizing trade because it has a transformative impact on trade finance transactions and enables greater transparency and enhanced security in addition to making it simpler and faster.

“The overall efficiency it brings to trade finance ensures cost effectiveness, quicker turnaround and potentially unlocks liquidity for businesses,” said Dave. “We’re delighted to partner with RIL and support enhanced digitization in trade finance. We believe that the collaborative approach adopted to develop this technology has the potential to transform conventional trade finance.”

The banks said that that transaction proved that the solution is a significant improvement for any organization involved in buying and selling goods internationally, as it truly brings together all parties onto one platform. It also validated the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation.

“We are excited to partner with HSBC on digitalisation of trade finance,” said Srikanth Venkatachari, joint chief financial officer of Reliance. “This reflects our continued commitment to embrace emerging technologies and industry first initiatives. The use of blockchain offers significant potential to reduce the timelines involved in exchange of export documentation from the extant 7 to 10 days to less than a day. When adopted at scale, it helps in significant optimization of working capital. Further, use of blockchain in trade finance enhances transparency, security and synergy across all the parties and stakeholders involved.”