Citi India Completes Blockchain-led Letter Of Credit Transaction; Reduces Processing Time To Three Hours For the LC transaction, Citi facilitated the process through its Treasury and Trade Solutions business in India and served as both LC Advising and Issuing Bank.
By Paromita Gupta •
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On Monday, Citi India announced it had completed its first Letter of Credit transaction through blockchain on Contour for its industrial manufacturing client Cummins India Limited.
"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 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 is a critical enablers of trade digitization. We are extremely pleased to be able to partner with Cummins and Contour in executing this transaction," shared Mridula Iyer, Head of Treasury and Trade Solutions, Citi South Asia.
This is the first blockchain-led LC transaction for Cummins and Citi India on Contour. Contour is a global digital trade finance network built on blockchain technology enabling multiple parties such as banks, corporates and logistics partners to collaborate and secure finance in a safe-real-time manner. Citi India is one of the founding trade bank members.
"We are a technology driven company and our key priority is to digitize 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 digitizing our processes we are able to drive efficiency across the value chain and is a win-win solution for stakeholders," said Ajay Patil, VP and CFO, Cummins.
Citi facilitated the LC process through its Treasury and Trade Solutions business in India and served as both LC Advising and Issuing Bank.
Contour's LC processing was seen to be reduced by 90 per cent. Traditionally, LC document presentation takes up to 5-10 business days, whereas Contour saw the transaction time be reduced to three hours. This also marks the first-ever domestic end-to-end blockchain-led LC transaction completed on Contour in India.
