Citi India’s treasury and trade solutions business has completed Contour’s first domestic end-to-end blockchain-enabled letter of credit (LC) transaction in the South Asian country.
The transaction is for Cummins India, an engine manufacturer and distributor.
According to Citi, document presentation took three hours, compared to the usual five to 10 days. Citi, one of Contour’s founding member banks, was both the LC advising and issuing bank, and Cummins and its customer are the bank’s corporate and commercial clients.
“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,” says Mridula Iyer, head of treasury and trade solutions, Citi South Asia.
“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,” Iyer adds.
“We are a technology-driven company and our key priority is to digitise our processes,” says Cummins vice-president and CFO Ajay Patil, adding that the company believes this will increase efficiency across its value chain and offer “a win-win solution for stakeholders”.
Contour is a digital trade finance network powered by blockchain technology. It enables banks, corporates and logistic partners to collaborate on a single platform.
In January this year, the network teamed up with India’s Tata Power to implement an end-to-end LC settlement process.
Contour previously provided the platform for a trade finance transaction financed by HSBC between Tata Steel and the UAE’s Universal Tube and Plastic Industries, which involved end-to-end digitisation of the documentation.