Citibank Introduces City Impex for Corporate Trading
Citibank has recently rolled out an online platform called City Impex, designed to enhance trading services for corporate clients. This initiative is reportedly the first of its kind among banks in Bangladesh, featuring a comprehensive suite of trade finance solutions that cover everything from LCS exports to payment management.
In a conversation with business standards, Tonmoy Modak spoke with Citibank’s DMD and Director of Trade Services, Faruk Ahmed, to delve into the platform’s features, its benefits, and what the future might hold.
How Does City Impex Streamline LCS Opening?
Before this digital system, customers had to rely on emailing or physically sending documents through bankers to open credit letters (LC), a lengthy process that required document verification—a standard practice across banks. However, City Impex changes that. Customers can now access the platform directly from their computers, inputting all their LC requests and payment processes right into the bank’s system. Once submitted, the LC can be processed via the Swift system, eliminating the need for additional document submissions.
In traditional systems, contacting the bank to get LC documents often caused delays. With City Impex, customers receive all necessary documents—including vouchers, Swift copies, and LC copies—in real-time without the need for bank interactions. The entire process of LC requests, openings, and approvals is now entirely digital, archiving all related documents in a Live Repository accessible for future reference. People are quite enthusiastic about the potential impact of City Impex on trade finance in Bangladesh.
Additional Platform Benefits
Some customers might not fully understand the limitations of LC. This has led, at times, to delays when an LC request falls short of the bank’s requirements. With City Impex, customers now have the ability to check their limits digitally, which simplifies the process significantly.
There’s also the need for suppliers to review LC drafts. Previously, this involved sending Proforma Invoices (PIs) back and forth. Now, the City Impex platform enables customers to create draft LCs using Swift modules directly.
The platform also allows users to track LC usage, outstanding amounts, and ongoing payment adjustments. This capability is especially important since local banks ensure that foreign payments are cleared consistently, even amid dollar shortages, thus maintaining operational reliability and limits. A solid reputation helps secure lower rates for LCs compared to competing banks.
Moreover, operating costs can be reduced. Traditionally, companies needed extra staff to handle LC documentation and related tasks. City Impex streamlines these needs, enhancing operational efficiency while cutting down on expenses.
Customer Reception Post-Launch
Since going live in July—after a trial phase that began in November—the platform has already attracted interest from corporate entities. In just two weeks, outreach efforts led to 59 direct pitches, with six companies onboarding the system. Feedback has largely been positive, signaling satisfaction and interest in formalizing agreements.
Target Audience for City Impex
The initial focus is on businesses, particularly multinational corporations (MNCs) and groups within the garment sector that frequently engage in LCS. Citibank handles approximately 400 LCs on a daily basis.
The business model segments clients into corporate, medium, and small categories. There are plans to bring medium clients onboard, with a focus on small clients later—typically those processing amounts up to $25,000.
While platforms like BKASH and digital banking have paved the way for financial inclusion in the retail sector, City Impex aims to extend these advantages to trading. By minimizing the reliance on intermediaries, the platform hopes to lower the final costs of goods and expand import access to remote companies.
Citibank’s Advantages from the Platform
The primary goal here is to expand the business portfolio while ensuring top-notch service for clients in the shortest time possible. Achieving service quality is vital for customer satisfaction, and it’s not always practical to grow by simply increasing loans.
That’s really why the platform was created. A happy customer is more inclined to open more LCs with Citibank, which is the ultimate objective. Currently, the bank manages about 25% of the trade volume, amounting to around $7.3 billion. This platform could potentially add another 25%, totaling approximately $2 billion, without additional staff costs.
Citibank’s Trade Finance in the Competitive Landscape
When comparing with other private banks, Citibank usually ranks either first or second. Last year, the volume of trade finance reached $7.3 billion and is anticipated to surpass $10 billion next year, even as imports decline but exports rise—albeit with LCs trailing behind higher export volumes.
Looking Ahead: What’s Next for Trade Finance?
At Citibank, there’s a strong emphasis on innovation. With the goal of enabling more customers to open LCs of $5,000 or $10,000, City Impex aims to make strides in this area. The platform will be fully digitized with AI capabilities for quick error detection and correction, alongside integrating anti-money laundering tools and price verification features. Additionally, a mobile app is on the horizon to facilitate tasks for corporate clients on their phones.
Future developments will also explore voice recognition and digitization of various international trade products, boosting functionality further.
Future Prospects for Bangladesh’s Trade Finance
Despite slower import growth, exports are progressing at a steady pace. Assuming a stable government is in place, increased public investment could also enhance imports. This could lead to a stronger focus on infrastructure and investor confidence, ideally boosting imports as well.
Ultimately, trade finance could become entirely paperless if institutions like Bangladesh Bank and Customs create an integrated platform. This will require coordination among banks, regulators, and government entities, allowing Bangladesh to operate more closely with advanced global economies.
