Citi has piloted a paperless trade finance transaction to facilitate the import of agrochemical products from India to Bangladesh.
The first to use the blockchain-enabled TradeLens platform in Asia-Pacific, Citi Bangladesh completed the entirely paperless process using an electronic bill of lading (eBL) for Syngenta Bangladesh.
The process resulted in a 10-day reduction in document processing times from around an expected 20 to 25 days. The transaction also led to a reduction of costs related to paperwork, postage, port demurrage and transport.
TradeLens is a blockchain-based shipping platform jointly developed by IBM and GTD Solution, a subsidiary of A.P. Moller-Maersk. The TradeLens eBL is a standard, industry-supported, end-to-end digital solution that provides shippers, cargo owners, freight forwarders, banks and carriers with a streamlined and secure process for the issuance, transfer and surrender of original bills of lading.
Md. Moinul Huq, Citi treasury and trade solutions head for Bangladesh, comments: “Trade has traditionally been reliant on paper-heavy documentation across multiple parties, thus making transactions complex and riskier. Innovative technologies and platforms are bringing substantial benefits to our clients and to Citi as their banking partner.”
TradeLens CEO Kim Spalding adds: “Supply chain processes are complex and the ability to collaborate seamlessly with multiple partners is critical. The continued integration of banks to the TradeLens platform is a valuable demonstration for the industry of the scalability of end-to-end blockchain and its impact on critical transactions.”
During the course of the shipment, all associated documentations were shared and validated among various parties via the TradeLens platform. Digitized documents included the eBL issued directly from the carrier as well as the commercial invoice, packing list, and certificate of origin.
The issued eBL was forwarded to the exporter, Syngenta Asia Pacific, on the TradeLens platform itself. The exporter, through its bank, then sent all the required documents electronically to Citi Bangladesh through the same platform. Both Citi and the exporter’s bank worked collaboratively with TradeLens towards the successful closure of the transaction.
“We will continue to make progress in our digitization efforts, leveraging industry platforms that can bring together multiple parties in a transparent manner, and making trade financing accessible through our own proprietary digital platforms,” says Kanika Thakur, Asia-Pacific trade head, treasury and trade solutions, at Citi.