Banks across the world are introducing web-based facilities with the aim of cutting down the length of time it takes to establish or part-process letters of credit (L/Cs).

Habib Bank Limited has set up a central processing unit at its foreign exchange branch in Karachi at a cost of around US$82,500. The new facility aims to reduce the 10-day processing period for establishing a L/C down to 48 hours. A staff of 25 will service the needs of 103 branches dealing in foreign exchange and exports throughout Pakistan.

Banco Santander Mexicano has announced a facility that it says will allow companies to obtain L/Cs easily, within three hours, 24 hours per day. Santander is reported by local media as saying that complications and delays in obtaining L/Cs to guarantee solvency are major problems for Mexican companies trying to set up import agreements with foreign companies.

The bank expects foreign trade in 2002 to increase by 5 per cent and one if its has been quoted as saying that under existing procedures, it takes on average five days to obtain a L/C, and then only after extensive negotiation and paperwork at bank branches,

Alongside technologies developed to improve the speed and efficiency of L/C processing, other technology developers are developing products for the corporate sector. SimCorp of the UK has launched a new version of its corporate treasury management system.

Amongst various benefits claimed by the company, a facility for managing L/C transactions is incorporated for the first time in its Version 4.2 of IT/2 technology that is primarily aimed at companies involved in cross-border inter-company or external transactions. Other new deals incorporated in the system include guarantees and commodity trades.

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