Singapore's DBS Bank, in collaboration with Audi Singapore and Audi's local distributor, Premium Automobiles, have completed the first trade financing transaction on Singapore's Networked Trade Platform (NTP).

The inaugural trade relates to a 3.5 million Singapore dollars (S$3.5 million - US$2.5 million) letter of credit (L/C) transaction for a trade of Audi cars between Audi and Premium.

L/C process digitalisedBy digitalising the process through the NTP, Audi and their retail partner Premium, are now able to submit bank applications, as well as send and receive trade documents online.

In turn, this enables DBS to receive and start processing e-applications in real-time, cutting short the trade financing processing time from about a week to under one working day, yielding greater operational efficiencies for both buyer and seller.

In addition, as trade documents are uploaded onto the NTP, all trade participants are able to enjoy real-time updates on the progress of their transaction, enabling them to better plan their working capital needs.Massive L/C marketThe bank said in a statement that the first transaction marks a critical step towards transforming documentary trade, of which domestic L/Cs constitute around US$150 billion of Singapore's trade flows.

Audi, Premium and DBS are currently working on the second trade on the NTP valued at SGD2.8 million.Since 2018, DBS has launched several ecosystems and platforms to encourage companies to move towards digital trade.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.