Two Singapore-based banks DBS Bank and OCBC Bank have taken the lead in digitalising trade finance in Singapore and the southeast Asia region by adopting blockchain technology.
According to media reports, both DBS Bank and OCBC Bank issued their first electronic banker’s guarantee on the Singapore Customs Electronic Banker’s Guarantee Programme on Monday.
The progamme is designed to shorten the banker’s guarantee issuance and submission process to the Singapore Customs from about four working days to less than 24 hours.
During the same period, DBS also completed its first trade financing transaction on the CamelOne Trade Finance Portal (TFP)- ) – which is Singapore’s first digital trade financing platform backed by banks such as United Overseas Bank, OCBC Bank, ANZ, BNP Paribas, HSBC, Industrial and Commercial Bank of China, MUFG and Standard Chartered Bank.
The trade finance transaction completed by DBS Bank relates to a $4.8 million letter of credit by Super Steel, a Singapore-based steel wholesaler, and supplier.
By digitalising trade finance, the TFP makes trade finance efficient in an unstable environment effected by political instability, trade frictions, and the Covid-19 epidemic.
DBS group head of trade product management Sriram Muthukrishnan told the media, “Trade finance is the lifeblood of commerce but can sometimes be quite manual and complex. By digitalising trade financing services through a one-stop portal, we are able to provide swift, easy and contact-free financing solutions to help our customers enjoy greater peace of mind when it comes to managing their banking needs.”
Earlier this month, DBS Bank also completed its first digital trade deal using the Networked Trade Platform (NTP)- a government of Singapore initiative which digitises paperwork to make government certification and third-party commercial services simpler.