India gets billions of dollars every year from its work force working in other countries, but it a few days of days for various procedures such as verification, presentation, recording, and reconciliation of invoices.
In order to process the payment on a real-time basis, Indian banks have decided to opt for blockchain technologies.
Let us look at five banks that have decided to adopt new technologies for remittances and other banking operations.
First bank to adopt blockchain technologies for banking transactions
Yes Bank is the first Indian bank that has decided to adopt blockchain technologies for banking transactions. It will be using IBM’s HyperLedger Fabric to invoice purchases and the general flow of money in the bank’s systems.
For remittances, the bank has partnered with Ripple, a company looking to solve cross-border payments through the use of blockchain and digital assets. The bank believes that this technology will disrupt SWIFT, the incumbent for cross-border payments.
Speaking on adopting XRP, Yes Bank’s Group President, and Head, Global Indian Banking Amresh Acharya said that this technology will disrupt SWIFT, the incumbent for cross-border payments. The bank is a majority holder of the second-largest digital asset in the world known as XRP, and will be using state-of-the-art technology innovation.
Distributed ledger technology to radically change the way international payments are handled
India’s third-largest bank, Axis Bank with over 4500 branches will be using inward remittance solution based on the blockchain technology.
For this, the bank will be using Ripple’s XRP for and has also partnered with UAE based RAK Bank for delivering its retail clients based in the Middle East.
The bank said that Ripple makes international remittances faster and transparent for customers while ensuring security and improving efficiencies. The transactions reach their destination account in minutes, with the certainty of settlement, and with end-to-end visibility over the journey of the payment.
Bank’s official said will using APIs and distributed ledger technology, there is an opportunity to radically change the way international payments are handled.
Blockchain solutions will make remittances real-time
India’s fourth-largest private bank, Kotak Mahindra Bank with 1600 branches also decided to opt for Ripple blockchain-powered architecture for cross-border payments.
The bank said that by using blockchain, it is not only looking to reduces the costs associated with remittances but also increase the speed from half a day to 3 days to near-instant remittance. The current cost will be reduced by 10-40%, along with increased interoperability with other Ripple partners such as Axis and Yes Bank and 200 others.
Banks chief digital officer Deepak Sharma said, “We are theoretically convinced that blockchain is the way ahead. But we have to establish a practical use of the technology. As of now, the focus is on whether the technology is scalable in the near future.”
Provide instant settlements on a highly secure infrastructure
In order to leverage new technologies, IndusInd Bank has also decided to use Ripple’s blockchain technology. With this, the bank will now have instant remittance access markets such as Brazil and China through Ripple architecture.
Explaining how this will enhance banking business, IndusInd Bank Senior Executive Vice President Ramesh Ganesan said that Blockchain technology for payments lowers both costs and transfer times for their customers. The Ripple platform will provide an enhanced experience to our clients by delivering instant settlements and confirmations on the back of a highly secure infrastructure.
The bank also plans to leverage the latest technology to build on its existing footprint in the payments business through this alliance.
Digitises paper-intensive international trade finance process as distributed, unalterable ledger
ICICI Bank was the first Indian bank in India to use blockchain solutions for authenticating remittance transactions and international trade documents.
For this, the bank has partnered with Emirates NBD for remittance and trade finance. Under this, transactions were allowed for the instant remittance of funds from Mumbai to Dubai in real-time. The bank has on-boarded over 250 corporates on this platform.
The blockchain application was created by ICICI Bank helps to digitizes the paper-intensive international trade finance process as an electronic, distributed and unalterable ledger, and gives the participating entities including banks the ability to access a single source of information.
The platform enables all the parties- buyers and sellers across domestic & international locations, all branches, and locations of ICICI Bank in the country and overseas, to view the data in real-time. It also allows them to track documentation and authenticate ownership of assets digitally and execute a trade finance transaction through a series of encrypted and secure digital contracts, the bank said in a statement.
The bank said that the usage of blockchain technology simplifies the paper-intensive trade finance process by bringing counterparties on the same platform, enabling decision making in almost real-time. This is in contrast to the current process wherein counterparties await the receipt of lengthy paper trails to initiate domestic/international trade finance transactions.
Blockchain ensures safer secured cross-border transactions
Federal Bank has also joined in adopting blockchain technology by partnering with Ripple for cross-border remittances solutions.
The bank has informed the Bombay Stock Exchange (BSE) that it has entered into a partnership with Ripple Inc, a blockchain supported global remittance company, for cross border remittance through its network. Powered by a blockchain-enabled solution, the Ripple platform ensures cross-border transactions much safer and secure.
This partnership will help Federal Bank to explore new corridors where Ripple is aggressively pursuing new partnerships. Banks’ MD & CEO Shyam Srinivasan signed the partnership agreement with Ripple’s Senior Vice President John Mitchell, the bank said in the filing.
What Ripple Says?
Ripple’s Software Integration Engineer Sachin Maheshwari said that RippleNet has dozens of banks using their distributed ledger technology already.
Right now many Indian banks are using RippleNet to complete thousands of transactions to the Middle East and reports say it only takes on to 3 minutes compared to days as it had always been.