Kotak Mahindra Bank does LC transaction using blockchain

Kotak Mahindra Bank announced it has done a letter of credit transaction using blockchain. The bank said using blockchain helped the bank to reduce the transaction time from up to 30 days involved earlier to less than two hours. It said it is the first bank in the country to successfully complete the proof of concept using blockchain for end-to-end trade finance transaction for one of its clients. It will now extend the facility to all its customers. K.V.S. Manian, president, Corporate, Investment and Institutions Banking of the bank, said while instant money transfers have progressed significantly, trade finance in India has a lot of catching up to do. This transaction is the beginning of a journey on integrating blockchain and moving towards full scale adoption, thus giving Indian importers, exporters and domestic traders the best solution, he added. The bank said the LC is one of the most tedious documents to process in banking, the time taken for a transaction deprives exporters from utilizing their sale proceeds efficiently. The bank partnered with consulting firm Deloitte and used the blockchain technology to complete LC transactions with JP Morgan Singapore as partner bank, it said. The bank also said it envisions a future where banks will collaborate and participate on blockchain consortium which will help improve operational efficiency, reduce risk of fraud and improve the customer experience in key offerings.