The Reserve Financial institution of India (RBI) has locked in HDFC Financial institution, ICICI Financial institution and State Financial institution of India amongst virtually a dozen lenders throughout the area to function a blockchain-based pilot mission centered on commerce financing, The Financial Occasions reported Thursday (June 23).
The hassle might assist forestall mortgage fraud throughout India, a difficulty that grew to become problematic within the nation when fugitive debtors Nirav Modi and Mehul Choksi gamed the system to siphon off 1000’s of crores of rupees, in line with the report.
Belgium-based SettleMint, United States-based Corda Applied sciences and IBM would supply expertise help for the mission, which might be centered in RBI’s Innovation Hub in Bangalore, the report acknowledged. Axis Financial institution, Financial institution of Baroda and Union Financial institution of India are additionally concerned within the pilot mission that can harness blockchain expertise to enhance the traceability of cash.
“We’re collaborating and supporting the initiative,” mentioned a Financial institution of Baroda spokeswoman.
The RBI, different banks and expertise companions didn’t reply to The Financial Occasions’ requests for remark.
Expertise suppliers are working with particular person banks beneath the stewardship of the RBI as a part of the hassle to find out how blockchain can facilitate and safe the banking system, in line with the report.
The tampering of paperwork like Letters of Credit score (LC) is among the mission’s focus areas, and blockchain expertise might help forestall the misuse of LCs. The target is to make blockchain expertise part of the Core Banking System (CBS), the report acknowledged.
“The pilot has begun with banks to run blockchain-backed techniques to challenge digital LCs,” an government concerned within the course of mentioned within the report.
Earlier this month, RBI mentioned in its annual report that it’s searching for a crypto “killer” and sees a central financial institution digital foreign money (CBDC) because the weapon of selection.
Learn extra: India Lauds Crypto ‘Killer’
