Bangkok Bank: and PermataBank collaborate to facilitate Letter of Credit on blockchain to enter the Thai-Indonesian chemical market, offering smooth transactions and encouraging digitized processes in line with the concept of green business for sustainable growth
Bangkok Bank and PermataBank collaborated to facilitate a letter of credit (L/C) through blockchain technology, highlighting the strength of both banks’ cross-border business networks to enter the Thai-Indonesian chemical market. The first customers are TPE and Lautan Luas who use trade finance services to reduce process, risk and cost. This will increase customer satisfaction while supporting businesses to digitize their work processes in line with the concept of green business for sustainable growth.
Bangkok Bank’s executive director Pipat Assamongkol said: “International trade is crucial to a country’s economic growth. International trade transactions need multi-step processes and require a large amount of paper documents which is a major obstacle. To help solve this problem, the bank has developed blockchain technology innovation for L /C, a service that uses Distributed Ledger Technology (DLT) or the Enterprise Blockchain Platform as an integral part of the effort to provide full commercial services*.”
The bank recently joined PermataBank to offer this innovation to both banks’ clients in the chemical industry. The bank was successful in supporting Thai Polyethylene (TPE), a company under SCG Chemicals or SCGC that exports plastic resins from Thailand to Indonesia, to submit a full electronic presentation for container ships. This helps to reduce paper use, carbon emissions and container yard fees for temporary storage of containers in the port. Therefore, trading partners in Indonesia receive goods faster, which increases business opportunities. Both trading partners were satisfied and appreciated the good experience from the services.
The bank joined PermataBank and TPE to provide an L/C through blockchain technology for the export of goods to Lautan Luas, one of TPE’s largest customers in Indonesia. Lautan Luas supplies chemical products to 2,000 industrial end users across Indonesia and Asia Pacific. This service enables both trading partners to check changes in the L/C application at any time, which improves transaction transparency, reduces the risk of errors and enables fast information tracking via digital channels, creates satisfaction for both trading partners and continuously plans for the use of the service .
Regarding the bank’s success, Mr. Pipat added, “This underscores the strength of Bangkok Bank and PermataBank’s service network collaboration to support international trade services through L/C on blockchain technology that can be adapted to support the different needs and nature of customers” businesses, such as supporting for multiple shipments and billing documents under the same L/C, etc.
“As a trusted partner, Bangkok Bank is proud to participate in financial development to help increase business efficiency, while speeding up work processes among parties involved in trade transactions and reducing costs. The strong international network and cooperation with PermataBank has enabled us to deliver great service and experience to our customers in Thailand and their overseas partners. More importantly, the digital end-to-end process also reduces the use of paper and transportation, which are carbon-emitting activities. Therefore, this service also includes on promoting the concept of green business, which is another dimension of sustainable business that Bangkok Bank also emphasizes.”
Mr. Darwin Wibowo, Director of Wholesale Banking at PermataBank, said: “The implementation of blockchain technology in trade transactions is PermataBank’s effort to help entrepreneurs and companies save time and reduce the risk of fraud, as well as streamline the transaction process, allowing businesses to grow faster. In addition, the use of blockchain technology is more environmentally friendly by reducing paper use and carbon pollution. PermataBank has become the first bank in Indonesia to offer trade finance transactions on a blockchain platform.”
Kulachet Dharachandra, Executive Vice President and Chief Financial Officer of SCG Chemicals Public Company Limited or SCGC, said: “TPE, a company in the SCG Chemicals Group, is committed to using innovation to deliver safe, convenient and fast services that also comply . to greater emphasis on ESG guidelines. We joined with Bangkok Bank and PermataBank to implement blockchain technology in L/C transactions with a partner in Indonesia, Lautan Luas Tbk. The technology enables the transaction status of all parties to be tracked instantly and transparently , streamlining the entire process of preparing L/C applications, receiving L/C and digital invoicing.Not only does it significantly reduce the time and use of paper in the transactions, but it also helps Lautan Luas cut additional costs that may arise from the container yard fees, to hold containers at the port in case the goods arrive at the destination port before the bill of lading. This has increased Lautan Luas’ satisfaction and the company aims to continue using L/C through blockchain transactions with TPE.”
Mr. Richie Masrin, Corporate Banking Manager of Lautan Luas Tbk, said: “The blockchain technology provided by PermataBank has facilitated our imported L/C transactions. Communication with suppliers regarding L/C can be done through this blockchain platform, from draft to settlement . . . Shipping documents can also be obtained digitally through the platform, which helps us speed up the cargo collection process at the port.”
Customers who are interested in L/C via the blockchain service and need more information can contact Bangkok Bank’s Business Customer Service on 0 2031 7888