IFFCO Singapore, the global manufacturer of food along with Standard Chartered have recently completed its very first finance trade transaction across borders using the blockchain platform named dltledgers. This particular deal included palm oil as well as its extracts that provide around $100 Million business per year for the IFFCO group. This includes the items being shipped all the way from the Asian territory to the factories in the Middle East. ISPL used the invoice financing method towards the buyer’s half & digital avalisation to prepare the documents from the seller’s side in the trade.
Avalisation of any trade bill is the guarantee offered by a third party, in this case, a bank, to honor the payment of the bill in due time. In this case, Standard Chartered bank was the party involved in both sides of this transaction. The mentioned transaction was actually executed in a three-hour duration as opposed to the traditional 10-day process with heavy paperwork. ISPL also believes that the platform can help this firm initiate multiple transactions in a single day, improve the process efficiency, & reduce the financing charges by 20 to 25 percent.
The platform, dltledgers is a Hyperledger that is fabric-based & provides the commodity traders a chance to connect with the supply-chain web. More than that, it also allows for digitization of the trade processes & financing of the documentations. This particular transaction by IFFCO had 50+ documents & 8 different lading bills. Transactions like this involve manual activities that tend to be paper-intensive along with the involvement of multiple parties. For companies that are involved in a high number of trade volumes, finance trade operations, as well as end-to-end trade, the complex processes involved start getting more efficient.
Standard Chartered’s global head for documentary trade, Samuel Mathew mentioned that there has been a strong adaptation of the dltledgers by corporate clients such as ISPL for the purpose of cross-border trade. With time, this will help reduce the instances of fraud and similar risks. It will also help build interconnectivity across borders while helping the banks proceed ahead of the complex transactions on paper. The use of the blockchain platform has made things more secure with an efficient flow.
Earlier during the very same year, the bank, Standard Chartered, successfully completed its very first finance transaction trade with the use of this blockchain platform while serving the Singapore based Agrocorp International company.
