For the first time ever, Tata Steel and HSBC executed a blockchain-enabled, paperless trade transaction.
The paperless trade transaction was made possible by Tata Steel’s collaboration across the spectrum over the Contour and essDOCS platforms.
The live trade finance transaction involved export of steel by Tata Steel to Universal Tube & Plastic Industries, UAE.
The Letter of Credit was issued by HSBC UAE for Universal Tube & Plastic Industries, UAE (importer), with HSBC India as the advising and negotiating bank for Tata Steel, India (exporter).
Tata Steel plans to explore similar opportunities in other export markets in future.
Peeyush Gupta, VP (Steel Marketing & Sales), Tata Steel, said adoption of this platform enables a faceless yet trustworthy all-time interface for better customer experience. This initiative, executed in collaboration with HSBC, demonstrates Tata Steel’s effort to lead technology-led disruptions by challenging the status quo and reimagining the global trade set-up, he said.
Hitendra Dave, Head-Global Banking & Markets, HSBC India, said having pioneered Blockchain technology deployment in trade finance, the bank is focused on enhancing its utilisation across a wider spectrum of trade finance transactions.
The transaction is a significant step towards mass commercialisation and adoption for a transformative impact on trade finance, he added.
Contour, which has been built on blockchain technology, enables the underlying LC trade transaction to be fully digitised from the LC issuance to presentation of documents. It also enables parties to transfer, manage and present electronic Bills of Lading and supporting documents within its platform via the interface with essDOCS’ CargoDocs platform.
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Corporates can reduce the costs associated with handling paper-based documents, its reconciliation and streamline their processing flow.
It also helps to reduce the document negotiation and banking transaction cycle from weeks to a few days, thereby aiding in unlocking of working capital for businesses.