Banking and technology are very closely associated and innovations have changed banking drastically over the period of time. The digital innovations in the banking sector started with the introduction of money that replaced the barter system and then the gradual replacement of wax seal with digital signatures. One such disruptive innovation which is changing the banking sector globally is blockchain technology.
Blockchain is one of the fastest developing technologies which has garnered the attention of the world and has also grabbed the attention of India’s financial system. Blockchain has been found to be applicable in various business niches.
Indian banks have shown their inclination towards the use of blockchain and have come up with various projects that will help them streamline their processes. The objective is to create a more transparent system that will be safe, secure and easy to track.
Key features of blockchain which make it an inevitable technology of the future–
Blockchain comes with a multitude of benefits which can prove to be great for the banks and NBFCs (Non-Banking Financial Company), here is a list of key features which makes blockchain a must-have technology for all :
- Eliminates intermediaries
- Easy to track
What are the Indian Banks doing in the domain of blockchain technology?
Let’s see what some of the prominent Indian banks are doing in this field:
- RBI or Reserve Bank of India– The governing authority of Indian banks, RBI, has shown an inclination towards blockchain. The IIDRBT or India’s Institute for Development and Research in Banking Technology (part of RBI), is working on the use of blockchain for the banking system.
- YES Bank– YES Bank has geared up to use the blockchain, it will bring Bajaj Electrical and other 32 vendors on board an invoice financing blockchain. The current process of invoicing consumes four days for verification, presenting, recording and reconciling the invoices before disbursing working capital loans. With the use of this technology, the bank will save time and running cost.
- Axis Bank– Axis bank has come up with an inward remittance solution based on the blockchain. With RAKBank, it will cater to the retail customers of the Middle East, and with Standard Chartered Bank (Singapore), it will cater to the corporate trade remittance. Axis bank is using Ripple for cross-border transaction network to run its remittance blockchain products.
- ICICI Bank– To facilitate the use of blockchain technology, ICICI bank is working to create a closed-loop wallet which will be used for within campus transactions. Apart from this, ICICI bank also has two blockchain-based solutions with Emirates NBD for remittance and trade finance.
- SBI or State Bank of India– SBI is also planning to use blockchain for smart contracts or KYC.
The crux of the matter is that Banking system in India is making use of blockchain technology for helping the customers and also for establishing a network which is far more safe and secure as compared to the current systems which the banks and other NBFCs are using.
Where do you see the blockchain technology spreading its wings in the near future? Let us know in the comment section.