Blockchain was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. Blockchain is a neoteric defined technology to outgrow the digital currency and all the developed and modified nature of the world. Blockchain technology can be integrated into various enormous areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most preferably the bitcoin. There are a few operational products maturing from proof of concept by late 2016. Most cryptocurrencies use blockchain technology to record transactions.
The 11 identified Banks are getting together to launch India’s first blockchain-linked funding for SME that include, ICICI, AXIS, HDFC, Kotak Mahindra, YES Bank, Standard Chartered, RBL, South Indian Bank, IndusInd Bank, State Bank of India and Bank of Baroda. Blockchain Infrastructure Company(BIC), is a consortium that organises the meetings held for and among the participatory Banks. The main agenda to build such a progressive initiative is to transform the face of lending to default-prone small firms. These Banks, participating in the major transform, work together to set up a live network that cuts timeframe in supply of chain financing, making it more transparent and secure.
“The idea of having such an organization is to remove any communication hurdle among the different banks,” spelled Abhijeet Singh, head of business technology at ICICI Bank. “A blockchain network can only thrive if the entire ecosystem is working in synergy through a single network. The core objective of having such a ledger network is to ensure transparency in credit disbursement, especially in the underbanked section,” he added.
The initiate of planned blockchain network could help the banks to access public credit data and help the people make their lending more judicious and less risk-based. this will also help the banks to remove the information hierarchy between large corporates and SME lenders to avail the perks from banks for the benefits. Initially, the doors to the concept will lead the augment to involve the orientation of a live network for supply-chain vendors amongst the nation, where they would be able to register themselves and digitize their records.
While, India’s first financial transaction through blockchain technology was made when HSBC used blockchain technology in a deal that involved an export by Reliance Industries to its client, Tricon Energy in the US, this was another major step leading to the conceptualisation and development to the blockchain-linked funding.
In October last year, ICICI Bank joined JP Morgan’s blockchain-based payment project called Interbank Information Network (IIN), and was then the mentioned, only bank from India to have joined JP Morgan’s proprietary blockchain platform. Kerala headquartered Federal bank is also on a way for innovating its remittance app based on R3 Corda, an open source blockchain project by R3CEV LLC that is known to be a distributed database technology company supported by more than 200 firms including banks and financial institutions such as Bank of America, Merrill Lynch, HSBC, RBS and Temasek, further others.