Blockchain Trade Financing Program to be Undertaken by RBI and Indian Banks
- According to the report, SettleMint, a Belgian company, Corda Technologies, and IBM (IBM) are providing the initiative with technological support.
- Despite Governor Shaktikanta Das’ prior statements to the contrary, India’s central bank is well recognized for its anti-crypto position.
- The experiment will be used by the central bank to show that the idea has practical applications before incorporating it into its main banking system.
India’s top banks are reportedly collaborating with the RBI on the project. India’s largest lender State Bank of India (SBI) is also said to be involved. The proof-of-concept will reportedly focus on trade finance and factoring services.
The move comes as part of the RBI’s ongoing efforts to explore blockchain technology. Earlier this year, the central bank set up an interdepartmental group to study the potential applications of blockchain in banking. The group is said to have submitted its report last month, though the contents have not been made public.
If successful, the proof-of-concept could lead to a full-fledged blockchain platform for Indian banks. This would be a major development for both the banking sector and the cryptocurrency industry in India. At present, there is no regulatory framework for either cryptocurrencies or blockchain in India.
The HDFC Bank, ICICI Bank, and State Bank of India are participating in a project that is designed to stop loan fraud. The report said that this will help to protect people and their money from being taken advantage of by criminals. This is a good step forward in the right direction for these banks.
This will be done by developing a blockchain application that can store digital versions of documents like LCs. The application will have features to prevent tampering with the documents and track any changes made to them. This will make it harder for fraudsters to commit fraud.
This project aims to prevent document fraud by issuing digital versions of commonly-tampered documents, like LCs. A digital document is more secure than a physical one because it cannot be physically altered without detection. Additionally, a digital document can be linked to an individual’s identity via biometrics or other means, making it much harder to commit fraud using someone else’s identity.
The project team will consist of developers, designers, and security experts who will work together to create the blockchain application. The team will also collaborate with banks and other financial institutions to test the application.