Business Desk :
City Bank has become the first Bangladeshi bank to execute a cross-border Letter of Credit (LC) transaction under a Shariah-based financing arrangement executed using blockchain technology. City Bank has partnered with the International Islamic Trade Finance Corporation (ITFC), the trade solutions arm of the Islamic Development Bank (IsDB) Group, which was both the advising as well as financing bank. The ITFC financed the LC under the Murabaha Trade Finance line with City Bank.
The LC was issued on behalf of Debonair Group, a leading Bangladeshi RMG exporter, for import of accessories for garments industries from a Hong Kong-based exporter, Apparel Link (HK) Ltd.
The transaction was conducted on Contour’s network, which was built using R3’s Corda blockchain technology. Processing time for this transaction was extremely short – LC draft initiation to issuance and advising took only 38 minutes compared to the typical 24 to 72 hours required for regular cross-border LCs.
Blockchain technology allows parties to manage their own data while transacting and viewing shared information seamlessly and securely with their trading partners and service providers.
