The Hindu Business Line : Soft launch of trade finance pilot project

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Mumbai Feb. 15 The Indian Banks' Association (IBA) launched a pilot project on trade finance using the structured financial messaging system (SFMS).

This system is presently confined to payment and settlement systems applications such as real time gross settlement (RTGS), national electronic funds transfer (NEFT) etc. It will enable domestic banks do away with paper-based handling of letters of credit while negotiating bills and cut costs.

The SFMS messaging format will be put on the INFINET network connectivity set up by the Institute for Development and Research in Banking Technology (IDRBT) of the RBI.

Mr K. Unnikrishnan, Senior Vice-President, said "It is quite similar to SWIFT in terms of messaging format and protocols with the only difference being additional security measures like `checker and maker'."

Close to 10 branches each of ten banks such as ICICI Bank, State Bank of India, Union Bank of India and Central Bank of India have joined the soft launch of the project.

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