Citi India has completed its first blockchain-enabled Letter of Credit (LC) transaction on Contour for its client Cummins India Limited (Cummins), a diversified industrials manufacturing company. The transaction is a first for both Cummins and Citi India on Contour, as Citi continues to advance its trade digitization efforts and further enhance client experience.
Contour is a global digital trade finance network, powered by blockchain technology, that enables multiple parties – banks, corporates, and logistic partners – to collaborate seamlessly and securely in real-time on a single platform. Citi is a founding member bank of Contour.
Contour’s decentralized global trade finance network has proven that LC processing time can fall by as much as 90%. Under the LC, document presentation usually takes 5-10 days, while for Cummins it was completed in three hours. This also marked the first domestic end-to-end blockchain enabled LC transaction completed on Contour in India.
Mridula Iyer, Head of Treasury and Trade Solutions, Citi South Asia, said, “A top priority for our trade business globally, and in India, is to simplify trade processes and reduce transaction time, as well as provide clients access to trade financing and working capital solutions, through digital platforms. Platforms such as Contour bring together multiple partners involved in a trade transaction while eliminating the need for paper-heavy documentation and is a critical enabler of trade digitization. We are extremely pleased to be able to partner with Cummins and Contour in executing this transaction.”
Citi, through its Treasury and Trade Solutions (TTS) business in India, served as both LC Advising and Issuing Bank. The transaction illustrates the strength of the ‘One Citi’ proposition where Citi’s market-leading digital solutions under its TTS business was able to offer a safer, faster, and paperless solution for the LC transaction between Cummins and its customer, which are corporate and commercial banking clients of Citi, respectively.
Ajay Patil, VP and CFO, Cummins said, “We are a technology driven company and our key priority is to digitize our processes. We are happy that Contour and Citi worked with us to launch the first blockchain enabled LC transaction in India. We believe that by digitizing our processes we are able to drive efficiency across the value chain and is a win-win solution for stakeholders.”