India-based Infosys Finacle has been inducted into International Financial Services Centres Authority ’s (IFSCA) Regulatory Sandbox framework to pilot its blockchain-based trade finance solution. Infosys Finacle will be collaborating with six banks in the first phase of the regulatory sandbox: Federal Bank, HDFC Bank, HSBC, ICICI Bank, RBL Bank, and State Bank of India.

The collaboration will mainly focus on testing of the blockchain-based Buyers Credit solution, for short-term credit in foreign currency for import payments and trade finance transactions. This will serve as a precursor to the solution being available as a SaaS-based offering for banks servicing clients from GIFT City. GIFT City is a planned business district in the state of Gujarat, India.

It is a business destination being created to help companies working in financial services and technology related fields. Willing to support a fintech hub at GIFT City, IFSCA had launched I-Sprint’21, a global fintech Hackathon, as part of InFinity Forum 2021. After multiple rounds of assessment, the Finacle Trade Connect, a blockchain-based solution was selected for the ‘Buyers Credit Optimization’ category and consequently, granted direct entry into the IFSCA’s Regulatory Sandbox.

IFSCA launched the Regulatory Sandbox in April 2022. The project is aimed at fintechs, and has been created as a time-boxed live environment with a limited number of real customers, where entities operating in the banking, insurance, capital market, and other similar financial fields can be granted certain exceptions from the application of obligatory provisions for experimenting with fintech solutions. Finacle Trade Connect helps banks, corporates, and various trade partners, such as shipping companies, insurers, and customs agencies, connect on a unified distributed network allowing for inter-organisation automation of trade finance processes.

Apart from Buyer’s Credit, the solution offers capabilities across Letter of Credit, Open Account for Trade, Bill Collection, Bill Exchange, C2C Transactions for Trade, B2C Transactions for Trade, PO Financing, Invoice Financing, Bank Guarantee, and Factoring. Infosys Finacle’s role in the sandbox As representatives say, Infosys Finacle looks forward to collaborating with different banks and the IFSCA to help reimagine trade finance processes. The Finacle Trade Connect solution wants to help banks digitise and automate the currently cumbersome trade processes, to discover new value propositions for the businesses and banking community.

Starting with Buyers' Credit, the Finacle Trade Connect solution intends to remove friction from the trade finance value chain by connecting various commercial banks, their international banking units at GIFT city, and their business clients on a unified distributed platform. The new platform plans to speed-up transaction times from weeks to hours and help with cost savings. The solution will also provide the marketplace capability where customers can request the participating banks’ international banking units at GIFT city to provide competitive quotes.

  Participants are looking forward to the current sandbox framework being expanded further by bringing more ecosystem participants on the platform for the benefit all stakeholders. In February 2022 Infosys Finacle, wholly-owned subsidiary of Infosys, and Union Bank of India partnered to offer banking services on WhatsApp to the bank’s customers. The service provided by the lender is titled Union Virtual Connect (UVConn) and intends to give its retail customers personalised, daily banking services, at their preferred time, place, and in seven languages.

.