SINGAPORE (Reuters) – Some of the world’s biggest banks in commodity trade financing are creating a digital trade finance registry in Singapore to try and mitigate the risk of trade fraud and boost transparency after losing billions of dollars due to a spate of defaults.
Banks have reduced their commodities business this year to cut risk following collapses, including that of Singapore’s Hin Leong Trading (Pte) Ltd, which shocked lenders after instances of financial trouble were laid bare by the coronavirus crisis.
In a joint statement issued on Tuesday, DBS Group
and Standard Chartered
said they are leading a group of 12 other banks in Singapore to create and conduct a central database to access trade transactions financed across banks.
“A digital trade registry strengthens trade financing banks’ ability to avoid duplicate financing, and facilitates more sustained credit flow in trade financing,” said Ho Hern Shin, an assistant managing director