ICICI Bank created blockchain application digitizes 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 information source
India’s largest private sector bank by consolidated assets, ICICI Bank, today declared that it has been able to get over 250 corporates on its blockchain platform for trade finance on domestic and international levels. This is the most by any bank in India.
In August 2016, ICICI Bank became the first and only bank in the country then and among the first few globally to successfully undertake pilot transactions on this nascent technology in international trade finance and remittance. This was done in partnership with Emirates NBD.
Since then, more than 250 corporates, including the country’s leading companies have signed up on the bank’s blockchain application to understand, experience and apply a more time, cost-efficient and secure way of undertaking domestic and international trade transactions.
With this, leading Indian corporates, including ones from the listed on Indian Stock Exchanges, are now undertaking and experiencing domestic and international transactions of trade finance on the bank’s custom-made blockchain platform.
With counterparties now being on the same platform with the blockchain technology, the traditional paper-intensive and time-consuming trade finance process would happen almost in real time. It brings in the ease to conduct precise and rapid transactions, removing the need to wait for courier of paper documents across cities/countries and authentication and confirmation through trade intermediaries. This is in divergence to the present process wherein counterparties wait for the receipt of lengthy paper trails to initiate domestic / international trade finance transactions.
This also removes the chances of fraud in trade finance credit lines, because of which the current Indian banking system is in the line of fire.
Top Indian corporates from ‘S&P BSE 100 Index’ have undertaken trade finance transactions of various types through ICICI Bank’s blockchain platform for trade finance. These include a cross-border remittance for salary payment to employees of a group company of an organization, domestic vendor payments in another city and payments for raw materials to a domestic channel partner among many others.
“We were the first in the country and among few globally to pioneer cross-border open account trade finance and remittance transactions on the blockchain. I am delighted to share that we have scaled up the operations to sign over 250 corporates on our blockchain solution for trade transactions, the maximum for any blockchain solution in the country,” said Chanda Kochhar, MD & CEO, ICICI Bank.
“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 the even greater adoption of this initiative,” added Kochhar.
ICICI Bank created blockchain application digitizes 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. It enables all the parties- buyers and sellers across domestic & international locations, all branches and locations of the bank in the country and overseas, to view the data in real time.
It also allows them to track documentation and validate ownership of assets digitally and accomplish 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 a secure network.