MUFG has completed the first fully digital trade finance transaction from its Gift City branch in India, processing a US$15mn letter of credit for Tata International in a matter of hours on Xalts’ blockchain-based network. 

The Japan-headquartered lender says in an announcement the transaction was undertaken on behalf of the Singapore-based treasury centre of Tata International, which is the trading arm of Indian conglomerate Tata Group. 

The bank used Xalts, which provides connectivity across a network of banks, corporates and logistics providers and allows users to digitise and automate end-to-end trade finance processes. 

MUFG says the letter of credit was digitally negotiated, prepared, applied for and accepted “within three hours, compared to a document-based transaction which would usually take up to two days”. 

“This breakthrough significantly enhances international trade efficiency and underlines MUFG’s dedication to leveraging technology in support of trade digitalisation, while enhancing its suite of transaction banking solutions for its clients,” the bank says. 

Belinda Han, managing director and head of transaction banking for Asia Pacific at MUFG, says the transaction “exemplifies our dedication to leveraging cutting-edge technology to drive sustainable growth and deliver exceptional value to our clients”. 

Deputy chief executive of MUFG India, Shashank Joshi, says the bank intends to build on the success of the transaction and “further replicate it with our wider set of clients”. 

The bank adds it is committed to India’s vision of becoming a “global financial hub”, and is now one of the largest lenders active at the Gift City International Financial Services Centre. 

For Tata International, connecting its multiple treasury centres to its trading counterparties and to MUFG creates “efficiencies and auditability for every financial instruction executed electronically”, says group head of corporate finance and treasury Sumit Sharma. 

“For a trading company like Tata International, the time saved in trade finance processes has a direct impact on our bottom line,” he says. 

Supreet Kaur, chief operating officer at Xalts, says the company looks forward to enabling “more corporate treasuries to reduce time, cost and manual effort in managing treasury and trade finance operations”. 

The announcement also marks a milestone for Xalts, which acquired the Contour network last year and has since introduced new functionality and expanded efforts to digitise trade processes. 

Most recently, it has introduced AI agents, which carry out tasks such as data management and reconciliation, banking queries and instruction, and trade finance processes, the company says.