City Impex will be a game changer in trade finance: City Bank DMD Faruk Ahmed

City Bank recently launched City Impex, an online platform aimed at providing seamless trade services initially to corporate clients.

Said to be the first of its kind among Bangladeshi banks, it offers a full suite of trade finance solutions, from opening import and export LCs to managing payments.

In an interview with The Business Standard's Tonmoy Modak, City Bank DMD and Head of Trade Services Division, Faruk Ahmed, discusses the platform's features, benefits, and future potential.

How does City Impex help customers open LCs?

Before the digital system, customers had to email or submit documents through a bank officer to open a letter of credit (LC), a time-consuming process as banks needed to verify all documents—a procedure common to all banks.

The City Impex platform transforms this process. Customers can now access the system directly from their computers, entering all LC requests and payment instructions straight into the bank's system. Once submitted, LCs are processed via SWIFT system, eliminating the need to provide additional documents separately.

Under the traditional system, obtaining LC documents required contacting the bank and often involved delays. With City Impex, customers receive all necessary documents—including vouchers, SWIFT copies, and LC copies—in real time, without further bank interaction.

All LC requests, openings, and authorisations are fully digital, removing the usual back-and-forth. A live repository stores all LC-related documents, giving instant access to past records whenever required. City Impex is set to be a game-changer in Bangladesh's trade finance sector.

What other advantages does the platform offer customers?

Often, customers are not fully aware of their LC limits. Consequently, when an LC request is submitted, the bank may find that the customer lacks sufficient limits, leading to delays. In such cases, customers previously had to contact their relationship manager to resolve the issue. In City Impex, customers can now check their limits digitally, streamlining the process.

Suppliers often want to review the LC draft. Earlier, customers would send us the proforma invoice (PI), and we would prepare and return the draft. Now, at the City Impex platform, customers can create the LC draft themselves in the SWIFT module.

The platform also allows customers to track LC usage, outstanding amounts, and periodic payment adjustments—all in one place. This is particularly important because City Bank consistently clears foreign payments on time, even during dollar shortages, ensuring that our correspondent banks continuously raise our limits. Higher limits enable us to reliably support our importers, and our strong reputation keeps LC confirmation or discounting charges lower than those at other banks.

Moreover, customers can reduce costs. Previously, corporate organisations often hired additional staff to manage LC documentation and related tasks. City Impex eliminates this need, reducing operational expenses while improving efficiency.

How have customers responded since its launch?

Since November, the platform's backend engine had been operating on a trial basis. After validating its performance during this phase, the platform was officially launched to customers in July. 

Within just two weeks, we pitched to 59 corporate organisations and onboarded 6, all of whom expressed satisfaction and reached out to formalise MoUs. This process is also helping us define authority metrics. 

Who is the platform's target audience?

Initially, our target customers are corporates, including various MNCs and business groups, as well as companies in sectors like garments that regularly open LCs. City Bank handles around 400 LCs daily.

We segment our business portfolio into corporate, medium, and small clients. Gradually, we have begun engaging the medium segment—such as producers in Keraniganj—to bring them onto the platform. Once corporate and medium clients are onboard, we will focus on the small segment, typically handling LCs up to $25,000.

While financial inclusion in the retail sector is largely achieved through MFS platforms like bKash or digital banking, City Impex aims to extend this to trade, enabling businesses in remote areas to open import LCs. By reducing intermediaries, we can lower the final cost of goods and broaden access to import opportunities even in distant regions.

How does City Bank benefit from the platform? Could it reduce workforce needs?

Our primary goal is to grow our business portfolio while delivering optimal service to customers in the shortest possible time. Expanding the portfolio by issuing more loans isn't always feasible, so ensuring service quality and efficiency is essential for full customer satisfaction. 

This is precisely why we developed the platform. Satisfied customers are more likely to increase the volume of LCs they open with us—our ultimate objective.

With our current workforce, we can manage an additional 25% in trade volume. The bank currently facilitates nearly $7.3 billion in trade; with this platform, we can boost that by another 25%, or approximately $2 billion, without increasing staff.

How does City Bank's trade finance standing compare to other banks?

Among private banks in the country, we consistently rank first or second. Last year, our trade finance volume reached $7.3 billion, and we anticipate surpassing $10 billion in the coming year. 

While imports are currently declining—leading to fewer import LCs compared with previous years—rising exports provide substantial grounds for optimism.

How will the platform redefine City Bank's trade finance outlook in five years?

City Bank has always been driven by innovation. Our honourable new chairman, former chairman, and visionary managing director share a common goal— extending trade finance to the country's underserved segments. Many customers in Bangladesh currently cannot open LCs of $5,000 or $10,000, but our new platform aims to change that.

We are fully digitalising the platform with AI to quickly detect and correct errors, integrating world-class anti-money laundering tools and price verification features. A dedicated app is also in development, enabling corporate clients to complete authorisations and other tasks directly from their phones—launching very soon.

Looking ahead, we are working on voice recognition and digitalising a range of international trade products to further enhance the platform's capabilities.

What is your perspective on the future of trade finance in Bangladesh?

While imports are currently experiencing slow growth, exports are performing strongly. Once an elected government assumes office, imports are likely to rebound, driven by commitments to the public. This, in turn, will spur investment, industrialisation, infrastructure development, and bolster investor confidence. Consequently, imports are expected to rise.

If Bangladesh Bank, Customs, and other stakeholders can establish an integrated platform, trade finance could become entirely paperless. Achieving this will require active collaboration between banks, regulators, and the government, enabling Bangladesh to operate on a level with many leading global economies.