Fifteen of India’s largest banks have invested in a fintech firm that aims to use blockchain to speed up domestic letters of credit, a first in domestic trade finance, regulatory filings to the National Stock Exchange of India show.
- Named the Indian Banks’ Blockchain Infrastructure Co., the firm uses blockchain technology to verify data using invoices on goods and services tax and e-waybills, which will speed up transactions and eliminate the risk of fraud — major causes of concern in India’s paper-reliant financial sector, according to a report by The Economic Times. It is said to be the first such venture for domestic trade finance in India.
- Stakeholders include the country’s biggest private lenders: HDFC bank, ICICI bank and Axis bank. Together, they hold 35.4 trillion Indian rupees (almost US$500 billion) of assets. Other private banks include Kotak Mahindra Bank, Federal Bank, Yes Bank, IndusInd Bank, IDFC First Bank, HDFC Bank, IDBI Bank, South India Bank and RBL Bank. There are also three government banks on the list: Indian Bank, State bank of India, Bank of Baroda and Punjab National Bank.
- Fourteen of the banks took equal stakes of around 5.5% in the company, representing 50,000 shares at 500,000 rupees each. ICICI bank has a slightly smaller 5.4% stake at 490,000 rupees each.
- The move comes amid India’s ongoing crypto regulation saga. One of the banks that has signed up to the project, ICICI bank, warned customers against using its international remittance services for transferring crypto or virtual currencies just two weeks ago.