In a pioneering move, China's Industrial Bank (CIB) has become the first joint-stock commercial bank to connect to the electronic letter of guarantee (e-L/G) functionality of the digital supply chain financial services platform of the Clearing Center of the People's Bank of China since the platform's full-scale implementation. On the first business day following the launch, CIB successfully issued, received, and registered two electronic letters of guarantee.
The e-L/G function optimizes the workflow for all participants, including banks, by creating a standardized process for managing the entire lifecycle of letters of guarantee. This includes issuance, registration, amendments, presentation, settlement, cancellation and inquiry. Leveraging the High Value Payment System (HVPS), the e-L/G functionality enables online fund clearing, marking a major step towards a digital supply chain finance ecosystem.
This innovative feature significantly streamlines the verification process of letters of guarantee, enabling financial institutions to efficiently authenticate letters of guarantee issued or registered on the platform. It enhances security by enabling direct transmission of issued letters of guarantee to the beneficiary's financial institution. It also enables the receipt of cancellation confirmations and claim notifications online, addressing the pain points of verifying beneficiary identity and intent.
CIB is committed to a scenario-based, digital-first and intelligent-powered approach, positioning itself at the forefront of the development of a unique supply chain finance ecosystem. It offers a comprehensive range of financial products and services to corporate clients, including payment processing, capital financing, financial advisory and ecosystem empowerment. Through its continuous efforts to enhance the CIB e-L/G product and its customer journey, CIB has established over 20,000 collaborative partnerships, contributing significantly to the high-quality development of the real economy.