Battered by the COVID-19 crisis, large Indian companies are looking to their banks for digital solutions that can make their supply chains more resilient to pandemic-related disruptions, according to a report from CRISIL Coalition Greenwich. These demands are speeding the transformation of trade finance - one of the banking industry’s last paper-based holdouts - into a digital business.

The global pandemic hit global trade flows harder than the global financial crisis of 2008–2009. Now, a second wave of COVID cases in the US and Europe are dashing hopes of an early recovery. For large Indian corporates, that could mean a continuation of troubles experienced in the first half of this year, including supply-chain disruptions due to lockdown measures, industrial shutdowns and the resulting delays in shipping and transport.

“Facing these challenges, Indian companies have changed their ‘ask’ to banking providers,” says Gaurav Arora, Head of APAC & Middle East at CRISIL Coalition Greenwich and author of 'Corporates Look to Digital Solutions as COVID Disrupts Trade Finance in India'. “In the crisis, operational agility and digital solutions are taking precedence over the traditional priorities of financing trades and meeting liquidity needs.”

A desire for digitisation

Unlike most areas of banking and business, the vast and diverse world of international trade and finance still relies heavily on the physical exchange of paper documents to function seamlessly. However, the results of a Coalition Greenwich study suggests that the business in India is changing. 

In 2019, 88% of respondents ranked 'competitive pricing' as a key criterion for trade provider selection, while only 11% considered quality of e-banking and digital platform a relevant metric. However, in 2020, we observed a sharp shift toward digital solutions, with 60% of the respondents ranking digitisation as a critical metric for evaluating a trade provider.

Although it is companies’ need for operational agility in the face of COVID-19 disruptions that is driving this increased demand for new solutions, the emphasis on digital will outlast the pandemic. Once the threat of the pandemic begins to dwindle, things like end-to-end supply chain visibility and digital interoperability will become much higher priorities for corporates that have now started down the digital path. This, in turn, will compel banks to evaluate their digitisation strategy and accelerate the digital transformation of trade finance. 

“With corporates increasingly adopting digital solutions to interact with their customers and seamlessly deliver services, they will inevitably demand a similar level of digitisation from their banks and other service providers,” says Arora.  

New online option for foreign companies setting up operations 

Against this backdrop, ICICI Bank has announced the launch of an online platform for foreign companies looking to establish or expand business in the country. Called ‘Infinite India’, the platform offers banking solutions as well as value-added services such as incorporation of a business entity, corporate filings, licences and registrations, HR services, compliances and taxation among others. An industry-first initiative, the ‘Infinite India’ platform is designed to offer convenience to foreign companies, as it eliminates the need of co-ordinating with multiple touchpoints leading to a hassle-free experience of doing business in India. 

The ‘Infinite India’ initiative is a part of the host of technology-enabled-services that the bank is offering to foreign companies and multi-national corporations (MNCs) coming to India. 

"Over the years, India has emerged as a preferred destination for foreign investment," commented Vishakha Mulye, Executive Director, ICICI Bank. "In these improved scenario, we are launching the ‘Infinite India’ portal, that brings together various banking and value-added services on one platform for foreign companies. It frees up their bandwidth from time-taking procedures and thus boosts their business growth by improving overall productivity and efficiency. The ‘Infinite India’ initiative is part of our strategy to further strengthen our technology-enabled offerings aimed to partner with foreign companies coming to India. We believe that our dedicated strategy for this segment will further simplify the journey of foreign companies looking to start or expand their business in India.” 

Breaking down the offerings

Some of the ‘value-added’ offerings that Icici Bank says the platform offers include:

• Incorporation services: Especially curated for the set-up stage, it offers advisory on laws and regulations to incorporate business in India as a joint venture, wholly owned subsidiary, liaison office, branch office, project office or a Limited Liability Partnership (LLP).
• Licences and registration: Foreign companies can apply and obtain licences and registrations in a timely manner on import/export code, FSSAI license, trade license, copyright solutions and patent registrations. 
• Taxation and compliance: Foreign companies can access to an array of tax and compliance related services such as filing annual returns of company, GST registration, income tax returns as well as corporate filings with the Ministry of Corporate Affairs (MCA) for registered office and amendment in memorandum of association (MOA). 
• HR services: Assistance in implementing HR related services including payroll processing, provident fund registration and return filing is also available. 

The key banking services are:

• Authorise set-up of office: As an ‘Authorised Dealer Category 1’, the bank can authorise the setup of Liaison Office (LO), Branch Office (BO) as well as a Project Office (PO) in India within the FEMA (Foreign Exchange Management Act) framework.
• State-of-the-art digital channels: The Current Accounts holders get access to its Corporate Internet Banking platform with over 300 services as well as a mobile banking application. It enables businesses to complete almost all their banking requirements digitally such as payments, receivables, foreign exchange, tax payments among many others. They also get convenience of automatic bank reconciliation with ICICI Bank’s Connected Banking, which is featured with popular accounting / ERP platforms. Also, they get the facility to easily undertake integrations with the Bank by using the APIs readily available on ICICI Bank’s API portal.
• Trade services with wide global network: It provides a wide range of trade finance solutions including Bank Guarantee (BG), Letter of Credit (LC), remittances among others. Also, it offers these through a comprehensive digital platform called Trade Online. Further, it provides outreach with correspondent network of over 400 foreign banks across 67 countries and foreign currency Nostro accounts in 26 currencies, ensuring that almost all international trade requirements are met. 
• Treasury services: The platform provides access to leading treasury operations in India with round-the-clock servicing. Also, it offers online booking of forex trades as well as a web-based treasury solution.

Any multinational from across the globe from any industry including IT, ITES services, manufacturing, pharmaceuticals, automotive, textiles among others can visit the ‘Infinite India’ portal and apply for the required service.