Citi India has completed its first blockchain-enabled letter of credit (LC) transaction with diversified industrials manufacturing company Cummins India Limited (Cummins). The transaction was conducted through global digital trade finance network Contour, of which Citi is a founding member bank.
The transaction is Contour’s first domestic end-to-end blockchain-enabled LC transaction in India.
Contour allows multiple parties to collaborate in real-time on a single, secure platform, using blockchain technology. The solution has been able to reduce LC processing times by up to 90 per cent, with document presentation on the Citi transaction taking only three hours.
Citi Treasury and Trade Solutions was both LC advising and issuing bank for the transaction.
Mridula Iyer, head of treasury and trade solutions at Citi South Asia, says: "A top priority for our trade business globally, and in India, is to simplify trade processes and reduce transaction time, as well as provide clients with access to trade financing and working capital solutions through digital platforms.
“Platforms such as Contour bring together multiple partners involved in a trade transaction while eliminating the need for paper-heavy documentation and are a critical enabler of trade digitisation."
Ajay Patil, vice president and chief financial officer at Cummins, adds: "We are a technology-driven company and our key priority is to digitise our processes. We are happy that Contour and Citi worked with us to launch the first blockchain enabled LC transaction in India. We believe that by digitising our processes we are able to drive efficiency across the value chain, a win-win solution for stakeholders."
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