India's Icici Bank has onboarded more than 250 corporate customers to its custom-developed blockchain platform for domestic and international trade finance
The blockchain application digitises the paper-intensive international trade finance process as an electronic, distributed and unalterable ledger, and gives the participating entities including banks the ability to access a single source of information.
The bank has been testing the system over the past two years and says that leading Indian corporates from the S&P BSE 100 Index have undertaken trade finance transactions of various types over the platform. These include cross-border remittance for salary payment to employees of a group company of an organisation, domestic vendor payments in another city and payments for raw materials to a domestic channel partner among others.
The shared ledger enables all the parties- buyers and sellers across domestic & international locations, all branches and locations of Icici Bank in the country and overseas, to view the data in real time. It also allows them to track documentation and authenticate ownership of assets digitally and execute a trade finance transaction through a series of encrypted and secure digital contracts. Further, it allows each participant to check online the status of the application and transmission of original trade documents through the secure network.
Chanda Kochhar, MD & CEO, Icici Bank says: "I envision that the emerging technology of blockchain holds an immense potential to simplify the document-intensive trade transactions by bringing all stakeholders on a single platform.
In another initiative, we are also collaborating with peer banks and other partners to create a comprehensive ecosystem in the industry using blockchain and evolve common working standards to contribute to even greater adoption of this initiative.”
Alongside its own inhouse programme, the bank is additionally working with a consortium of peers to invite trade finance participants, including including buyers, sellers, logistics partners, insurance companies and other authorities on to a co-operatively-owned and developed blockchain platform for an industry-wide end-to-end digitised trade solution.