DBS Group Holding and Saudi Arabian financial institution Banque Saudi Fransi (BSF) have signed a memorandum of understanding (MOU) to expand their trade settlement, financing and regional currency clearing solutions.
The MOU was signed at the sidelines of Sibos, a global finance services conference organised by Swift, on Oct 16. The move aims to promote trade and capital flows within the Asia-Gulf Cooperation Council (GCC) economic corridor, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, according to the joint release.
Under the MOU, DBS and BSF will provide trade financing solutions such as letters of credit, bankers’ guarantees and trade loans to each other’s clients. Both banks will also explore jointly financing client transactions to better manage risk and expand their respective financing capacities.
In addition, both banks will explore utilising the other’s clearing networks for local and regional currency clearing. This includes DBS' access to seven of Asia's largest currency clearing corridors, Singapore, China, Hong Kong, Taiwan, India, Indonesia and Vietnam, and BSF's access to Saudi Riyal clearing services.
BSF will also look at using DBS’s cross-border payment platform, GlobeSend, to enable its customers to make same-day payments overseas.
To DBS’s group head of global transaction services product management, Sriram Muthukrishnan, the move is timely. "Asia and the Middle East are growing increasingly interconnected as businesses, investors and talent pursue opportunities in these dynamic markets.”
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“Our partnership with BSF builds upon DBS’s connectivity across Asia and our track record in providing secure and efficient access to trade financing and cross-border payments. This aims to facilitate the seamless flow of goods, services and capital across this corridor – ultimately benefitting businesses, end-consumers and communities,” he adds.
BSF’s head of institutional banking, Faisal Darwish, sees the partnership as a “significant step in strengthening financial connectivity between the GCC and Asia”.
“By combining our networks and expertise, we aim to deliver innovative solutions in trade financing and cross-border payments. This collaboration will open new opportunities for businesses and consumers alike, while reinforcing Saudi Arabia’s role in driving growth across this dynamic economic corridor,” he adds.
