GAIL partners with Swift India and Axis Bank to digitize bank guarantees

GAIL (India) and Swift India have jointly announced that the former has become the first Indian corporate to adopt Axis Bank‘s digitized Bank Guarantees.

This transformative solution ensures secure, transparent, and seamless transactions. GAIL, renowned as India’s leading natural gas company, has partnered with Swift India, a joint venture between 11 major banks in India, and SWIFT SC, a global messaging service provider.

The introduction of e-BG (electronic Bank Guarantees) represents a critical community proposition to automate the issuance and consumption of Bank Guarantees digitally.

By activating e-BGs through Swift India’s platform, GAIL now benefits from ISO-based messaging standards, ensuring a seamless and secure process for issuance, amendment, and invocation of e-BGs. The adoption of Straight-Through Processing (STP) further facilitates faster turnaround times compared to traditional paper-based methods.

R K Jain — GAIL Director (Finance) said: “The entire end-to-end process of digitization of Bank Guarantee and Stand by Letter of Credit (SBLC), from issuance till its invocation, will be a seamless process without any manual intervention.”

GAIL digitizes bank guarantees in collaboration with Swift India and Axis Bank. Photo courtesy of Indian fireman/Wikimedia Commons.

Axis Bank is said to have played a key role in this endeavor, working closely with GAIL and Swift India. As the first bank to accomplish the design, development, and delivery of a comprehensive paperless solution, Axis Bank has covered the complete life cycle of Bank Guarantees, including issuance, advising, amendment, and invocation.

The e-Bank Guarantees provided by Swift India offer multiple benefits, including enhanced processing capabilities for corporate entities, a multi-bank and multi-corporate solution, e-stamping, and fraud reduction through the utilization of the GSTN network for invoice discounting. This digital solution encompasses various functions, such as issuance, amendments, invocation, and release of bank guarantees.

Through the implementation of eBGs, Swift India is not only driving the digitization of the finance ecosystem but also playing a pivotal role in reducing fraud, mitigating operational risks, accelerating transaction turnaround times, minimizing environmental costs associated with paper usage, and streamlining business operations.

Vivek Gupta — Axis Bank President and Head of Wholesale Banking Products said: “Axis Bank has always been at the forefront in leading digitisation initiatives in Transaction Banking for our Wholesale and Commercial Banking clients to significantly enhance their customer experience. We are pleased to launch the industry leading, global trade ISO standards-based e-BG proposition for our valued client GAIL, in close partnership with SWIFT India.

“Through this solution, we will help GAIL in eliminating paper associated with Guarantees, in seamless track & trace of such guarantees, in reduced fraud and in speeding up transaction turnaround times.”