India’s Reliance Industries uses Blockchain Technology for Overseas Payment
A proud day for Indians, Mukesh Ambani’s Reliance Industries with the help of British bank HSBC used Blockchain Technology to send payments overseas to an American company massively reducing the time it took for processing the documents.
The blockchain based transaction was sent by Reliance to US-based Tricon Energy which works with petrochemical buyers and suppliers worldwide. As per the joint statement by Reliance and HSBC India, RIL CFO Srikanth Venkatachari says:
“The use of blockchain offers significant potential to reduce the timelines involved in the exchange of export documentation from the extant seven-ten days to less than a day.”
As per reports, The blockchain based platform was integrated with the electronic bill of lading (eBL) platform to issue and manage an electronic bill of lading, it said, adding this allows a digital transfer of the title of goods from the seller to the buyer in the underlying trade. The solution is a significant improvement for any organization involved in buying and selling goods internationally, as it brings together all parties onto one platform.
Major Indian Banks like State Bank of India, ICICI, Kotak Mahindra, HDFC and Yes Bank are also working to use blockchain technology to cut down on transaction time and cost.
HSBC’s head of global banking and markets Hitendra Dave says –
Blockchain has a transformative impact on trade finance transactions and enables greater transparency and enhanced security in addition to making it simpler and faster. It can ensurecost-effectivenesss, quicker turnaround and also potentially unlock liquidity for businesses.
The letter of Credit (LC) for the transaction between the 2 parties was issued by Brussels based ING Bank for Tricon with HSBC India for Reliance. This transaction also validates the commercial and operational viability of blockchain as an alternative to conventional paper-based documentation.
The current system uses paper-based LCs to validate transactions and physical documents are sent to both parties in the transaction by post, courier or fax. While it may be assuring, it takes a lot of time and cost to process the documents. Blockchain technology in contrast to that is fast and costs almost nothing.
HSBC along with five other banks globally supporting the ‘Corda application’ will be seeking to expand the network as open source to drive mass adoption and connect the current financial institutions to blockchain technology.
Despite the Cryptocurrency ban in India, Blockchain Technology is still progressing with major corporations now adopting blockchain into their business.
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