Standard Chartered announced today that it has completed a trade finance transaction with the Bank Payment Obligation (BPO) under the Uniform Rules for BPO (“URBPO”) for PTT Polymer Marketing (“PTTPM”), a leading polymer sales and marketing company in Thailand.
The BPO transaction was established between PTTPM in Thailand and Polymer Marketing DMCC in Dubai on 24th of June and has since matured on the 15th of July. This end-to-end BPO transaction was fully automated through Straight2Bank, the Bank’s fully integrated online banking platform, under the URBPO that was launched in April and went live in July 2013.
The URBPO is a new set of industry-wide standards in supply chain finance for international trade settlement. The rules were developed jointly by the International Chamber of Commerce (ICC) and SWIFT, based on standardised messaging and advanced transaction data matching. Standard Chartered worked closely with both organisations, playing a significant role in developing the rules. With the URBPO, Standard Chartered clients can now enjoy the assurance of global acceptability in addition to the existing benefits of BPO transactions including enhanced risk management, reduced time and cost through faster paperless processes, and the payment certainty matching that of Letters of Credit (“LC”).
Commenting on the transaction, Mr. Saravut Damrichob, Vice President, PTT Polymer Marketing Co., Ltd., said:
“Getting paid on time has always been a key requirement for us as an exporter. Standard Chartered has brought to our organisation the new Bank Payment Obligation instrument, allowing us for the first time ever, to process transactions in a fully automated mode. BPO provides us with the flexibility of open account trade combined with the payment certainty of Letters of Credit.”
Mr. Supachoke Liamkaeo, President, Polymer Marketing DMCC, added:
“BPO provides us with a number of efficiency benefits through reduced document handling, shorter processing times, and lower commitment issuance costs compared to the traditional instrument of LCs as the commitment can be issued a lot closer to the shipment date. The BPO programme has made it possible for us to improve our operational efficiency, making our operations less complex and improving our competitiveness.”
Neil Daswani, Global Head of Global Corporates, Transaction Banking, Standard Chartered, said:
“We are very pleased to complete the industry’s first fully automated BPO transaction under URBPO for PTTPM. In response to increasingly fast-paced and competitive trade environments, corporates are looking for ways to enhance efficiency in managing their working capital. Many firms have been looking forward to the industry standards that would ensure global acceptability and provide a legal framework for BPO. We see significantly increased client interest in BPO transactions since the arrival of the URBPO.”
Ashutosh Kumar, Global Head of Corporate Cash and Trade, Transaction Banking, Standard Chartered, said:
“BPO is particularly relevant to emerging markets, especially Asia, where open account trade finance is not as widely accepted as in the West. It will speed up payment cycles in support of the ever-accelerating physical supply chain while retaining the payment assurance. BPO captures the best of both worlds with the efficiency of an open account and the payment certainty of an LC. We expect the URBPO to help boost the BPO adoption among both banks and corporates, which would in turn establish a sustainable ecosystem for BPO.”
Andre Casterman, Head of Corporate and Supply Chain Markets, SWIFT also added his insights:
“Over the last decade, we have become a strategic partner for banks and multinational corporations in payments and cash management. Given the expected growth of trade in the next decade, driven by growing south-south trade flows, we are now sharpening our focus on this market in order to help our member banks extend their transaction banking value propositions. Standard Chartered is obviously taking a leading position on our strategic trade innovation based on the Bank Payment Obligation.”
Standard Chartered has been at the forefront of efforts to offer corporate clients innovative services and is committed to supporting clients for their growth agenda in Asia, Africa and the Middle East.