YES BANK, India’s fourth largest private sector bank announced that it has completed a first-of-its-kind digital transaction with Welspun Global Brands (WGBL) – a subsidiary of Welspun India Limited, in the form of e-Presentation, involving end-to-end electronic presentation of export documents. The importer, exporter, bank and shipping company use a common digital platform and also connect with the customs department. WGBL has yearly export flows of over $ 700 mn. The digital presentation of documents is done on an asset lite model over a cloud based SaaS platform. The payment continues to flow through the banking channels i.e, SWIFT network. The payment and document digitisation is mutually exclusive. Over eighty percentage of Welspun’s sales is in USA with a customer size of 20-25.
The electronic documentation of international trade e-presented through a digital platform built by UK-based Bolero International, will replace the need to exchange physical documentation, thereby reducing turn-around-time from 10 days to real-time for all parties involved, while establishing a precedent for faster, secure, cost-efficient settlement of cross-border trade, resulting in optimization of working capital. The customs authorities at the port also accepts electronic bill of lading over a digital platform. Welspun has begun with one customer and gradually, the plan is to onboard all the customers.
Benefits of end to end export trade digitisation
The solutions have been built around various facets of global trade: Letter of Credit, Guarantee, Supply chain, etc. The digitisation of the end to end export documentation process replaces the physical documents like bill of lading or invoice. In addition to the exporter and importer, the shipping company is also included in the digitisation chain. They are onboarded on the Bolero platform. In this way, all the stakeholders involved in an overseas transaction are brought onto the digital platform and any kind of physical document transfer is eliminated. “This has a major impact on working capital efficiency, because there is no delay in document transfer. It happens in realtime. This enables in immediate payment release with subject to the credit period decided upon between the trading parties,” says Ajay Rajan, Group President and Global Head Transaction Banking Sales at YES BANK.
There have been three major benefits for Welspun. “The turnaround time in document transfer has been slashed from days to hours. Hitherto, the documents had to be transferred from either Mumbai, Anjar, Mundra and Hazira ports, from where the consignment is shipped, to the bank’s branch in Mumbai. Whereas, now, it happens digitally, in realtime,” shares Altaf Jiwani, CFO, Welspun. A shared services centre is currently operational in Vapi, Gujarat to process the transactions. The tracking and traceability of the documents using the platform is also an important feature. It allows to identify, at which phase of the transaction the respective documents are at any given point in time.
Commenting on the development, Rajan said, “Collaboration and innovation have been the mainstay at YES BANK since inception and the Bank has emerged as a leader in digitizing the trade finance space in India. We are pleased to partner with Welspun and Bolero to facilitate digitization of presentation of export documents. With the introduction of electronic presentation of documents under collections and Letter of Credit, we aim to leverage our strength in establishing collaborative ecosystems to not only transform work-flows at the bank’s level but also effect significant manpower and turn-around-time reductions for all partners involved. We will soon extend this service to all our clients involved in cross-border trade.”
This novel initiative not only allows for operational efficiencies but also helps the Bank strengthen existing relationships and create a secure platform for 360 degree visibility and audit trail from creation to surrender.
Managing Information security
YES Bank did a thorough review of the Bolero platform from an Information Security perspective. The CIO, CISO and CTO were involved in the review process. The necessary Information security policies and the regulatory guidelines in the wake of the recent breach incidents with SWIFT were considered while exploring the platform. RBI doesnt allow any manual intervention when the SWIFT network is interacting with the bank’s Core Banking Solution. It has to be a straight through process. The system resides on an MPLS cloud, provided by Tata Communications, with a primary, backup line and tertiary line provided by a different vendor.
Anil Nimbargi, CIO, Welspun informed about the two level security cover provided for the document digitisation platform. “The IT team of Welspun and Bolero studied the document digitisation and the information flow on the IT network to arrive upon a security cover: device level application access and Bolero’s user access management system,”
Commenting on the partnership with YES BANK and Welspun Global Brands Limited (WGBL), Gary Cutress, Sales Director from Bolero International said, “We are very excited to be partnering with YES BANK helping them to deliver innovative solutions to their customers. For Bolero it is yet another landmark that points to how we are at the centre of India’s trade revolution, leading the advance towards digitization, greater efficiency and transparency. We look forward to continuing an excellent and rewarding relationship.”
The way forward
YES BANK plans to add more buyers and geographical locations to be covered using the Bolero platform. “We are in consultations with many MNCs in India to explore this platform,” informs Rajan. The bank has also used Bolero for import transactions for a large MNC in India.
Welspun Group is also planning to invite all its the importers to join the Bolero platform – most of them are Fortune 500 companies. “They would like to join this platform as it offers benefits of faster trade turnaround times, overcoming geographical barriers and eco friendly transactions,” says Jiwani.
With over 80 shipping companies and some of the biggest MNC banks, regional and local banks having joined the SaaS based Bolero platform, it will provide a highly scalable model to digitise the global trade.