Author: Jagdish Kumar, India
In order to make banking reach the last person of the country, Indian banks are now moving towards blockchain technology for offering services.
Apart from providing financial inclusion, usage of blockchain will speed up the process in approving new loans that takes days even months to process.
Speaking on this, a consortium of 14 locals banks that had recently signed up for India Trade Connect consortium, Abhijit Singh, head of technology at ICICI Bank Ltd said that from the banks’ point of view, business will increase and transactions will happen in scale once block chain is adopted.
India Trade Connect is a product of world renowned India’s software giant, Infosys Ltd, which has recently signed a contract with another seven banks for using its blockchain technology.
Currently, 14 banks consortium handles more than half of India’s internal trade transactions.
According to the US consulting firm Celent, banking transactions processed through will be worth about $2.45 trillion annually.
Banks responsible for about half of India’s internal trade have joined a consortium that aims to introduce blockchain technology in order to speed up processes and reduce hurdles to approving new loans.
It is not only India, banks around the world are moving towards adopting blockchain for cross-border trade finance transactions, touting the benefits of the digital ledger technology for both speeding up transactions and improving security.
Recently, HSBC Holdings Plc completed a transaction which it said showed the technology was commercially viable for global trade finance.
According to Yes Bank, one of the consortium member, the Indian trade finance process currently takes 22 days to complete and is not environment friendly, as it is very paper-intensive.
After turning towards blockchain, the project should reduce those delays to less than a day and larter on the same process can be used for remittance process too, Yes Bank’s chief information officer, Anup Purohit said.
However, Purohit also stressed that the process of switching India’s internal trade transactions entirely to blockchain is likely to take three to four years before we fully exploit blockchain technology.
Image Credit: corporateethos.com