India's Axis Bank says it has executed an industry-first blockchain enabled trade transaction involving letter of credit (L/C) processing on a domestic blockchain platform backed by the country's government.

The transaction underlines Indian ambitions to digitalise of L/C and other trade finance services for domestic transactions following the launch last year of the Indian Banks' Blockchain Infrastructure Company (IBBIC).

SLDE first

Axis Bank successfully completed earlier this month the first blockchain domestic transaction on the state backed Secured Logistics Document Exchange (SLDE) in a trade between Arcelor Mittal Nippon Steel India and Lalit Pipes and Pipes.

The transaction involved L/C advising as well as digital presentation of underlying trade documents, including invoice and transport documents.

Executing transactions on the SLDE platform aims to resolve the familiar list of issues with paper-based trade transactions including limited transparency, slow speed of transfer of physical documents and lack of an audit trail.

Indian L/C digitalisation

Axis Bank was one of fifteen founding entities in IBBIC, a blockchain trade finance consortium established in June last year that will initially harness blockchain technology to process L/Cs for domestic transactions in India (DC World News, 21 June 2021).

Four private banks and three banks in which the government of India has at least a majority share subsequently joined the founding banks that comprised ten private-sector banks, four public-sector banks and one foreign bank (DC World News, 4 August 2021).

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