Prime Bank has become the first Bangladeshi bank to executean interbank blockchain Letter of Credit (LC) transaction improving speed, efficiency and cost-effectiveness of the transaction, said a press release.
The transaction was conducted with HSBC, which the first bank in Bangladesh to conclude cross border trade transaction through the network.
The pilot transaction was completed through global trade finance blockchain network Contour, whereby an inland LC was opened by Prime Bank on behalf of AnantaGroup for import of materials from Tamishna Group.
The end-to-end process of pre-negotiation and drafting of LCs by Importer and Beneficiary, approval, issuance of LCs and presentation of documents were all concluded digitally through Contour's network, the press release added.
Faisal Rahman, managing director and CEO (Current Charge) of Prime Bank said: "As Bangladesh is fast becoming a leading trading country, Prime Bank as a leading trade finance bank in Bangladesh, is exploring ways to get most benefits of digitization in trade frontiers."
"We are elated to offer our client blockchain LC transaction with support from HSBC and Contour that is real-time, hassle-free, paperless and at the same time low-cost," he added.
Shams A Muhaimin, head of transaction banking and structured finance of Prime Bank said, "It is our pleasure today to announce successful completion of first blockchain L/C by a Bangladeshi bank through Contour network."
Kevin Green, country head of wholesale banking of HSBC Bangladesh said: "After completing the first successful execution of a cross-border Blockchain Letter-of-Credit (LC) transaction recently, this partnership with Prime Bank solidifies our strong commitment to take Blockchain forward in Bangladesh."
"Compared to paper-based LC system, Blockchain LC transaction took very short time to complete the entire process of LC initiation to document submission to acceptance, ensuring all the standard formalities of trade," said Sharif Zahir, managing director of Ananta Group.
"Etafil Accessories Limited (Tamishna Group) is proud to have collaborated with HSBC and Contour on this historic blockchain LC transaction and we look forward to reaping the benefits of the deployment of distributed ledger technology in day to day trade," said Naweed ¬¬Alam Chowdhury, director of Tamishna Group.
"As this transaction has shown, Contour's network is flexible, able to work for a regional bank or corporate as well as a global trade finance bank or a multinational corporation," Contour CEO Carl Wegner said.
"Providing a solution that works for everyone is at the heart of what we do and our work with Prime Bank hopes to further this goal," he added.
Contour's network has established itself as an effective solution to the barriers in international trade and reduces the processing time of LC presentation by up to 90% - from 10 days to 24 hours, the press release added.
Importer, exporter, issuing bank and beneficiary's bank receive real-time tracking of the transaction, enabling a transparent management of the trade, the press release further said.