A NEW SMART BL;OCKCHAIN
Sep 30, 2024
Intro of the news
Intro of the news
In a pioneering move, fifteen Indian banks have collaborated to form the Indian Banks' Blockchain Infrastructure Co Pvt Ltd (IBBIC), aiming to revolutionize trade finance through blockchain technology. This consortium includes major private and public sector banks such as State Bank of India, ICICI Bank, HDFC Bank, and Standard Chartered. By leveraging blockchain, IBBIC seeks to streamline the processing of inland letters of credit (LCs), reducing transaction times from 4-5 days to mere hours and minimizing paperwork. The platform enhances security by verifying data against goods and services tax (GST) invoices and e-way bills, thereby mitigating fraud risks.
What is Trade Finance?
Formation of IBBIC: Fifteen Indian banks have formed the Indian Banks' Blockchain Infrastructure Co Pvt Ltd (IBBIC) to implement blockchain in trade finance.
Major Banks Involved: Participants include State Bank of India, ICICI Bank, HDFC Bank, and Standard Chartered, among others.
Faster Transaction Processing: Blockchain reduces the processing time for inland letters of credit (LCs) from 4-5 days to just a few hours.
Enhanced Security: The system verifies transactions against GST invoices and e-way bills to minimize fraud risks.
Investment & Technology: Each bank is investing about $680,000, with Infosys Finacle Connect providing the blockchain platform.
“ Blockchain's decentralized and immutable nature allows for real-time tracking and reduced risks of fraud, streamlining processes like document verification and cross-border payments. ”
Miranda H. Halim
Each participating bank is investing approximately $680,000, totaling $10.2 million, to implement this system using Infosys Finacle Connect. This initiative signifies a significant step towards digital transformation in India's banking sector, fostering efficiency and transparency in trade finance operations.
