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ABS launches central registry for banks' trade financing deals to avoid duplicates

Jovi Ho
·2-min read

The industry initiative aims to mitigate the risk of duplicate financing for the same underlying trade.

The Association of Banks in Singapore (ABS) has launched a registry that will maintain a centralised record of trade finance transactions in Singapore.

The Trade Finance Registry (TFR) is supported by key trade financing banks in Singapore, such as DBS Bank, OCBC O39 Bank, Citibank N.A., BNP Paribas and Standard Chartered Bank (Singapore), with United Overseas Bank U11 (UOB) chairing the project.

Launched at the ABS’s 50th anniversary dinner on June 23, the industry initiative aims to mitigate the risk of duplicate financing for the same underlying trade.

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“This initiative will help enhance trust and confidence among banks and traders,” says Wee Ee Cheong, outgoing ABS chairman and chief executive officer of UOB, in his opening speech. “It will strengthen Singapore’s reputation as one of the world’s leading centres for trade.”

Participating banks will register new trade financing transactions on TFR, and if any of the new transactions are found to be duplicated, this will trigger notifications in near real-time for further action.

Only information on corporate customers will be provided to the TFR, which will then be encrypted. As such, duplicate trades can be identified without exposing the banks’ underlying data fields to other participating banks.

In addition to the project leads above, other participating banks include the Singapore branches of Bank of China, CIMB Bank Berhad, Deutsche Bank and ING Bank; as well as MUFG Bank, Sumitomo Mitsui Banking Corporation and the State Bank of India, among others.

TFR will also improve the transparency of trade financing transactions by enhancing their ability to validate authenticity of trade, through API connections to the Singapore Trade Data Exchange (SGTraDex), a public digital platform that shares data between supply chain ecosystem partners.

Ong Ai Boon, director of the ABS, says: “The launch of TFR is a testament to the collaborative spirit and collective focus of the banking industry to address issues of national importance. ABS is pleased that in bringing the industry together, we have created a utility that will bolster the confidence of all stakeholders in undertaking trade finance in Singapore.”

Marcus Lim, assistant managing director (banking and insurance) at the Monetary Authority of Singapore, says: “Collective action is needed to effectively deal with the risk of duplicate trade financing, and we are supportive of this industry initiative. TFR will be an important tool to strengthen banks’ risk management capabilities, thereby bolstering trust in Singapore’s trade finance ecosystem.”

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