Citi India has completed the first blockchain-based Letter of Credit (LC) deal on Contour for an industrial company called Cummins India Limited (Cummins). This exchange is a big deal for both Cummins and Citi India because it is the first time they have used Contour, a global digital trade finance network that runs on blockchain technology.
This new platform makes it easy and safe for banks, companies, and transportation partners to work together in real-time on a single platform. Citi was one of the first companies to join Contour when it was created. The time it takes to process LCs has dropped by 90% thanks to Contour’s decentralized network for global trade finance.
The LC rules say that the process of presenting a paper normally takes between five and ten days. But Cummins was able to finish this process in an impressively short time of three hours. This deal was the first time a domestic LC transaction based on Contour was made possible by blockchain technology and completed successfully from start to finish.
Mridula Iyer, who is the Head of Treasury and Trade Solutions for Citi South Asia, says that one of the main goals of their trade business in India and around the world is to simplify trade processes and cut down on the time it takes to complete a deal. Also, they want to give their customers digital ways to receive trade credit and working capital options.
Digital platforms like Contour are very important to the digitization of trade because they bring together all the parties involved in a trade deal and get rid of the need for paper-based paperwork. We are excited to work with Cummins and Contour on this deal. In India, Citi’s TTS business worked as both an LC Advising Bank and an Issuing Bank.
