City Bank, in partnership with the International Islamic Trade Finance Corporation (ITFC), has executed a Shariah compliant cross-border letter of credit (LC) transaction, becoming the first local bank to do so.
Advised and financed by the ITFC, the Murabahah trade finance line was issued on behalf of Debonair Group for the import of accessories for garment industries from Hong Kong-based exporter Apparel Link (HK).
Also significant is the fact that the deal is the first Shariah compliant transaction concluded on the Contour’s network, which was built using R3’s Corda blockchain technology. The transaction was processed in 38 minutes — from LC draft initiation to issuance and advising — instead of the usual 24 to 72 hours typically required in traditional cross-border LC transactions.
“We are finally seeing the trade finance industry embrace digitization and reap the benefits of improved connectivity and efficiency in LC presentation,” shared Carl Wegner, CEO of Contour. “As we continue building the world’s trusted network for global trade, we are keen to ensure this growing ecosystem of banks, corporates and technology providers remains inclusive and accessible for all.”