15 banks have joined hands to form the Indian Banks’ Blockchain Infrastructure Pvt Ltd (IBBIC) that will utilise the blockchain technology for the processing of inland letters of credit (LCs).
This system will assist in data verification through invoices on goods and services tax (GST) along with e-way bills that will subsequently expedite transactions and thus cut down the risks of possible frauds as well.
The group comprises of 10 private sector banks, four public sector banks and a solitary foreign bank with each of them holding an equal 6.66 per cent stake in the company. Bankers reportedly believe that that this new mechanism will put an end to paperwork and as aforementioned, bring down the time of transactions to a few years in a secure environment.
The company will have a total capital of Rs 75 crore with each of the banks having agreed to invest Rs 5 crore each in it. Moreover, the system will be based upon Infosys’ Finnacle Connect. Other banks can also join the company as it is expected to start operations within a year with the recruitment process set to begin later this year.
The Reserve Bank of India (RBI) is well aware of these developments and hasn’t raised any objection to the same, Economic Times reports.
The participating banks in this joint venture are: HDFC Bank, Kotak Mahindra Bank, IndusInd Bank, Federal Bank, IDFC First Bank, ICICI Bank, Yes Bank, RBL Bank, Mahindra Ban, State Bank of India (SBI), Bank of Baroda (BoB), Indian Bank, Canara Bank and Standard Charter.