India’s Blue Star drives treasury efficiency and digitises bank guarantees
Published: Feb 2025
Best Emerging Technology Solution
Highly Commended Winner
Blue Star Limited
Photo of Rakesh Patwari, HSBC and Snehal Suchak, Blue Star Limited.
Snehal Suchak
Assistant General Manager, Treasury
Swati Rane
Head-FP&A, Treasury and Investor Relations
Founded in 1943, Blue Star Ltd is India’s leading heating, ventilation, air conditioning and commercial refrigeration (HVAC&R) company headquartered in Mumbai.
in partnership with
The challenge
Blue Star Limited (BSL) is required to provide bank guarantees to its customers to support its core business requirements. Guarantees are required to be issued at the time of bidding for contracts, towards advance payments and performance, across 400+ beneficiaries. BSL’s current order book is INR36bn from multiple customers which demands a large volume of bank guarantees (BG) resulting in a great deal of time, energy, manual intervention and processes.
Each BG is vetted by the bank and confirmed by the applicant, with beneficiary consent. This involves multiple processes and layers which demand significant manual effort. The vetting request is done via email which makes document control and tracking of BGs more cumbersome.
With high volumes, it was critical to make the process more efficient and keep track of the BGs, for both stakeholders, HSBC and BSL. Furthermore, there were multiple business divisions of BSL coordinating with the bank’s vetting team.
The solution
BSL has introduced a wording collaboration tool for bank guarantee text vetting. BSL is now able to collaborate on a single document electronically on HSBC’s internet banking platform thereby replacing the need to review and examine the documents via email and eliminating the back-and-forth follow-ups in the process.
“This has helped us immensely to streamline the BG vetting process thereby bringing transparency, efficiency and reduction of efforts,” explains Snehal Suchak, Assistant General Manager, Treasury.
BSL is one of the pioneers in introducing this solution which has reduced turnaround time through digitisation. It introduces capabilities to review, negotiate and agree customised BG text between the bank, BSL and the beneficiary. With large BG volumes, this has resulted in a significant saving in man-hours, which can be effectively deployed on other priorities.
Best practice and innovation
The wording collaboration tool is a market first solution to enable real time collaboration to review, negotiate and agree bespoke BG texts between BSL and the bank. Through this solution, BSL introduces process efficiency by migrating from manual text vetting to digital vetting. This is not practiced by any other bank and has set a benchmark of an efficient practice.
Key benefits
Process efficiencies leading to faster turnaround time.
Enhanced automation.
Reduction in errors.
Helps standardisation of BG text, wherever possible.
Ian Tandy MBE
Managing Director, Co-Head of Global Trade Solutions, Asia Pacific, HSBC
Our collaboration with Blue Star has vastly streamlined the bank-guarantee vetting process. Through digitisation – migrating from manual vetting and collaborating on a single digital document housed on our Internet Banking platform – we have reduced the number of workhours and eliminated cumbersome back-and-forth follow-ups, improving turnaround time, bringing efficiency and setting a benchmark for excellence.
in partnership with
The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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