A group of 11 Indian banks will come together to launch the country’s first blockchain linked funding for small and medium enterprises (SME) to bring about change in the existing lending practices.
The banks reportedly include, ICICI, Axis, HDFC, Yes Bank, among others, as per a report published by news portal, Money Control. Other banks that will function as outside members will include, State Bank of India, South Indian Ban, Bank of Baroda, to name a few.
Abhijeet Singh, Head of Business Technology at ICICI Bank, told the portal, “The idea of having such an organisation is to remove any communication hurdle among the different banks. A blockchain network can only thrive if the entire ecosystem is working in synergy through a single network.” The discussion is being mediated by a consortium known as Blockchain Infrastructure Company (BIC) between the participating banks.
Singh also explained that having a ledger-network would ensure transparency in the credit disbursement process, ‘especially in the underbanked section.’
This is not the first time, that banks in India have discussed the possibility of integrating blockchain and finance. As earlier reported by Crypto-News India, State Bank of India in association with over 30 banks was planning to develop a blockchain based exchange that will assist the public lender in data-driven price discovery, last year.
At the time, Sudin Baraokar, Head Innovation, at State Bank of India (SBI) had said, “The project will go live in the next 3-4 months. Although I cannot mention the names of the banks involved, it is basically a part of the Bankchain Alliance. The project is an extension of the blockchain-enabled project Bankchain.”
Apart from that, individual banks have also attempted to partner with their international counterparts in order to facilitate blockchain technology. Last year, Indian bank ICICI announced that they had successfully carried out its debut banking transaction on blockchain in partnership with Emirates NBD.
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